Mathematics for Finance: An Introduction to Financial Engineering

Key differences between 2nd and 1st editions

• Time lapse between current and previous publications: 7 years (2010 vs 2003).
• In Second edition the material has been thoroughly revised and rearranged.
• Each chapter begins with acase study -- a real-life situation motivating the development of theoretical tools. A detailed discussion of the case study at the end of each chapter.
• New chapter 6 "Binomial Model" dicsusses:
• Definition of the Model
• Option Pricing
• American Claims
• Martingale Property
• Hedging
• New chapter 8 "Continuous Time Model" presents the following fresh topics:
• Shortcomings of Discrete Models
• Continuous Time Limit
• Overview of Stochastic Calculus
• Options in Black-Scholes Model
• Risk Management