Derivative Pricing Models - Introduction to Mathematical Finance

Author: Sun Jian
Publisher:
Publish Date: 2007-02-01
Features: In the author's view, any excellent simulation of financial derivatives has two important tasks: one is the replication and hedging strategies of derivatives to reduce the uncertainty of final returns; the other is to make the replication and hedging as little dependent on the model itself as possible. Because this book is about the theory of financial models, it goes to great lengths to establish various models, yet the goal is to make our methods independent of the model. This may seem contradictory. Once you finish this book, readers will certainly have a deeper understanding of this. That will be the third realm. This book includes two parts: Basic Theory and Advanced Theory. The Basic Theory part can serve as a textbook for a one-semester course in the direction of financial derivative models, while the Advanced Theory part can be used as a course for quantitative finance graduate students or as lecture material for seminars. The author strongly recommends that traders, risk managers, or investment managers working in financial institutions, mutual funds, or hedge funds become familiar with the basic part of this book. This book introduces the definitions and characteristics of major equity-based financial derivatives and systematically explains the mathematical models for pricing these option products as well as the hedging methods used in practical operations.