An Introduction to Equity Derivatives is the updated andexpanded second edition of the popular Finance and Derivatives:Theory and Practice. Designed for new practitioners, investorsand students, the content covers all of the fundamentals ofquantitative finance clearly and concisely.
Each chapter of the book includes numerous illustrations andexercises accompanied by the relevant financial theory, coveringkey topics such as present value, arbitrage pricing, portfoliotheory, derivatives pricing, delta-hedging and the Black-Scholesmodel. Each topic is introduced to the reader in a succinct andconsistent style that makes the complex subject matter accessiblefor those who have no financial background.
This revised and extended edition includes a new forewordwritten by Professor Emanuel Derman, one of the most acclaimedresearch scientists in the field of quantitative finance, as wellas two new chapters covering cutting-edge concepts, volatilitytrading and exotic products. The existing chapters have beenreworked to include even more accessible content as well asadditional examples and illustrations.
The chapters form a sequence of gradual difficulty, separatedinto three sections. Part one, Building Blocks, covers thefundamental concepts used in quantitative finance, interest rates,the time value of money, bonds and yields, portfolio valuation,risk and return and diversification. Part two, First Steps inEquity Derivatives relies on discrete time concepts and coversforward contracts, options and option strategies, the binomialmodel, the lognormal model, Monte-Carlo simulations and dynamichedging. Finally, part three, Advanced Models and Techniques, goesone level higher into continuous time finance and covers models forasset prices, stochastic processes and calculus, the Black-Scholesmodel, volatility trading, exotic derivatives and advancedmodels.
Written by the internationally respected author team ofSébastien Bossu and Philippe Henrotte, An Introduction toEquity Derivatives is an excellent resource for financeprofessionals and investors looking to acquire an understanding offinancial derivatives theory and practice.