Financial Derivatives Pricing, Applications, and Mathematics [Paperback]

This book is a graduate level manual on the pricing of financial derivatives.This book is a graduate level manual on the pricing of financial derivatives. It allows the reader with basic knowledge of finance, calculus, and probability and statistics to understand the most powerful tools in applied finance. The three-fold focus is on equity derivatives, interest rate markets, and the mathematics of pricing. These concepts are applied in turn to the valuation of conventional and more specialized cases such as equity derivatives, government bonds, corporate bonds, swaps, caps, and swaptions.This book is a graduate level manual on the pricing of financial derivatives. It allows the reader with basic knowledge of finance, calculus, and probability and statistics to understand the most powerful tools in applied finance. The three-fold focus is on equity derivatives, interest rate markets, and the mathematics of pricing. These concepts are applied in turn to the valuation of conventional and more specialized cases such as equity derivatives, government bonds, corporate bonds, swaps, caps, and swaptions.Combining their corporate and academic experiences, Jamil Baz and George Chacko offer financial analysts a complete, succinct account of the principles of financial derivatives pricing. Readers with a basic knowledge of finance, calculus, probability and statistics will learn about the most powerful tools in applied finance: equity derivatives, interest rate markets, and the mathematics of pricing. Baz and Chacko apply concepts such as volatility and time, and generic pricing to the valuation of conventional and more specialized cases. Other topics include: *Interest rate markets, government and corporate bonds, swaps, caps, and swaptions *Factor models and term structure consistent models *Mathematical allocation decisions such as mean-reverting processes and jump processes *Stochastic calculus and related tools such as Kilmogorov equations, martingaló%