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Introduction to the Mathematics of Finance
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The idea is to provide the necessary theory on a "need-to-know" basis. In
this way, readers who choose not to cover the continuous pricing theory,
for example, need not deal with matters related to continuous probability.
The book is organized as follows. The first chapter is devoted to the
elements of discrete probability. The discussion includes such topics as
random variables, independence, expectation, covariance and best linear
predictors. If readers have had a course in elementary probability theory
then this chapter will serve mostly as a review.
Chapter 2 is devoted to the subject of portfolio theory and risk
management. The main goal is to describe the famous Capital Asset
Pricing Model (CAPM). The chapter stands independent of the
remainder of the book and can be omitted if desired.
The remainder of the book is devoted to asset pricing models. Chapter 3
gives the necessary background on stock options. In Chapter 4, we
briefly illustrate the technique of asset pricing through the assumption of
no arbitrage by pricing plain-vanilla forward contracts and discussing
some simple issues related to option pricing, such as the put-call option
parity formula, which relates the price of a put and a call on the same
underlying asset with the same strike price and expiration tim
Steven Roman - Personal Name
NONE
Introduction to the Mathematics of Finance
Banking And Finance
English
978-0-387-21364-4
2004
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