Book description
Risk Neutral Pricing and Financial Mathematics: A Primer provides a foundation to financial mathematics for those whose undergraduate quantitative preparation does not extend beyond calculus, statistics, and linear math. It covers a broad range of foundation topics related to financial modeling, including probability, discrete and continuous time and space valuation, stochastic processes, equivalent martingales, option pricing, and term structure models, along with related valuation and hedging techniques. The joint effort of two authors with a combined 70 years of academic and practitioner experience, Risk Neutral Pricing and Financial Mathematics takes a reader from learning the basics of beginning probability, with a refresher on differential calculus, all the way to DoobMeyer, Ito, Girsanov, and SDEs. It can also serve as a useful resource for actuaries preparing for Exams FM and MFE (Society of Actuaries) and Exams 2 and 3F (Casualty Actuarial Society).
 Includes more subjects than other books, including probability, discrete and continuous time and space valuation, stochastic processes, equivalent martingales, option pricing, term structure models, valuation, and hedging techniques
 Emphasizes introductory financial engineering, financial modeling, and financial mathematics
 Suited for corporate training programs and professional association certification programs
Table of contents
 Cover image
 Title page
 Table of Contents
 Copyright
 Dedication
 About the Authors
 Preface
 Chapter 1. Preliminaries and Review

Chapter 2. Probability and Risk
 2.1 Uncertainty in Finance
 2.2 Sets and Measures
 2.3 Probability Spaces
 2.4 Statistics and Metrics
 2.5 Conditional Probability
 2.6 Distributions and Probability Density Functions
 2.7 The Central Limit Theorem
 2.8 Joint Probability Distributions
 2.9 Portfolio Mathematics
 2.10 Exercises
 References
 Notes
 Chapter 3. Discrete Time and State Models
 Chapter 4. Continuous Time and State Models
 Chapter 5. An Introduction to Stochastic Processes and Applications
 Chapter 6. Fundamentals of Stochastic Calculus
 Chapter 7. Derivatives Pricing and Applications of Stochastic Calculus
 Chapter 8. MeanReverting Processes and Term Structure Modeling
 Appendix A. The ztable
 Appendix B. Exercise Solutions
 Appendix C. Glossary of Symbols
 Glossary of Terms
 Index
Product information
 Title: Risk Neutral Pricing and Financial Mathematics: A Primer
 Author(s):
 Release date: July 2015
 Publisher(s): Academic Press
 ISBN: 9780128017272
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