Description
Book SynopsisThe proliferation of financial derivatives over the past decades, options in particular, has underscored the increasing importance of derivative pricing literacy among students, researchers, and practitioners. Derivative Pricing: A Problem-Based Primer demystifies the essential derivative pricing theory by adopting a mathematically rigorous yet widely accessible pedagogical approach that will appeal to a wide variety of audience. Abandoning the traditional black-box approach or theorists' pedantic approach, this textbook provides readers with a solid understanding of the fundamental mechanism of derivative pricing methodologies and their underlying theory through a diversity of illustrative examples. The abundance of exercises and problems makes the book well-suited as a text for advanced undergraduates, beginning graduates as well as a reference for professionals and researchers who need a thorough understanding of not only how, but also why derivative pricing works.
Table of Contents
1. An Introduction to Forwards and Options 2. Forwards and Futures 3. Option Strategies 4. Binomial Option Pricing Models 5. Mathematical Foundations of the BS Framework 6. The Black-Scholes Formula 7. Option Greeks and Risk Management 8. Exotic Options 9. General Properties of Option Prices
