Introduction to Financial Mathematics

Author: Wu Lan
Publisher:
Publish Date: 2005-08-01
Features: This book is a professional foundational textbook for undergraduate students in financial mathematics at higher education institutions. It focuses on refining and synthesizing the fundamental mathematical models and methods used in financial computation and analysis. The book consists of eight chapters. Chapter 1 introduces the basic concepts and methods of interest calculation; Chapter 2 covers the calculation of annuity cash flow models; Chapter 3 presents the fundamental methods for calculating general investment yields; Chapters 4, 5, and 6 introduce corresponding computational methods for some basic issues in finance; Chapter 7 provides an introduction to the fundamentals of interest rate risk analysis; and Chapter 8 offers a basic introduction to the calculation of financial returns in stochastic scenarios. The content of the book is closely aligned with practical applications, clearly and concisely presented, and easy to understand. The examples are typical, abundant, and closely tied to real-world scenarios, offering practical application value. Additionally, the book strives to provide a consistent and intrinsic mathematical expression for common and fundamental financial calculations, emphasizing the training of readers' quantitative analysis and computational skills while appropriately providing the financial context for these calculations. To meet teaching needs, each chapter is equipped with a sufficient number of exercises, and selected answers and hints are provided at the end of the book for the convenience of both instructors and students. This book can serve as a foundational textbook for undergraduate students in financial mathematics, actuarial science, and financial engineering at higher education institutions specializing in applied mathematics and finance. It can also be used as a training textbook for financial professionals in quantitative financial methods and mathematical finance, as well as an introductory reading for others interested in mathematical finance. The content of the book covers the interest theory portion of Topic 2 in the actuarial exams of the Society of Actuaries in North America, making it a valuable reference for those preparing for various actuarial exams.