Mathematics for Finance An Introduction to Financial Engineering [Paperback]

Mathematics for Finance: An Introduction to Financial Engineering combines financial motivation with mathematical style. Assuming only basic knowledge of probability and calculus, it presents three major areas of mathematical finance, namely Option pricing based on the no-arbitrage principle in discrete and continuous time setting, Markowitz portfolio optimisation and Capital Asset Pricing Model, and basic stochastic interest rate models in discrete setting.

From the reviews of the second edition:

This second edition & is to start each chapter with the presentation of a case study and to end each chapter with a thorough discussion of that study. The authors also added new material on time-continuous models, along with the essentials of the mathematical arguments. & The current book is more substantial & . Summing Up: Recommended. Upper-division undergraduates and graduate students. (D. Robbins, Choice, Vol. 48 (10), June, 2011)

Throughout the text, the authors invite active reader participation. One way is by opening and closing each chapter with a case study. & authors have embedded all of the exercises in the discussion. & Solutions to all exercises appear in an appendix. This makes the book excellent for self-study. & this book provides an excellent introduction to financial engineering. & authors display impressive dexterity in ushering the reader from basics to an understanding of some of the deepest and most far-reaching ideas in the discipline. (David A. Huckaby, The Mathematical Association of America, February, 2011)

This second edition consists of standard topics for undergraduate level financial mathematics courses, plus an introduction to materials from an adlÓ)