Financial Engineering

Author: Xu Chengming
Publisher:
Publish Date: 2006-09-01
Features: This book consists of ten chapters and can be divided into four parts. Part I (Chapter 1), which primarily introduces the concept, development history, and driving forces of financial engineering. Part II (Chapters 2 and 3), where Chapter 2 covers an overview of futures (exchange) and forward markets, as well as the pricing of related derivatives; Chapter 3 introduces the options market, mainly including the concept of options, their pricing characteristics, and trading strategies. Part III (Chapters 4, 5, 6, and 7), where Chapter 4 discusses the pricing principles and theories of derivatives, primarily covering general derivative pricing theories such as no-arbitrage pricing, risk-neutral pricing, the development history of option pricing theories, and the classification methods of option pricing; Chapter 5 introduces numerical methods for option pricing; Chapter 6 covers the pricing of path-dependent options and credit derivatives; and Chapter 7 discusses the pricing of interest rate derivatives. Part IV (Chapters 8, 9, and 10), where Chapter 8 introduces risk management; Chapter 9 discusses investment innovations in financial markets; and Chapter 10 covers financing innovations in financial markets. This book emphasizes the historical development of derivative pricing and highlights the application and understanding of pricing methods. Each chapter includes review questions to help readers better grasp the content. The book is suitable as a textbook for undergraduate students majoring in finance, economics, and financial management in higher education institutions. It can also serve as a training manual for professionals in financial institutions. For readers interested in financial engineering, this book is an ideal choice.