Mathematics for Finance: An Introduction to Financial Engineering 2nd Edition PDF Download Ebook. Marek Capinski and Tomasz Zastawniak combine financial motivation with mathematical style. Assuming only basic knowledge of probability and calculus, it presents three major areas of mathematical finance, namely Option pricing based on the no-arbitrage principle in discrete and continuous time setting, Markowitz portfolio optimisation and Capital Asset Pricing Model, and basic stochastic interest rate models in discrete setting.
This text is an excellent introduction to Mathematical Finance. Armed with knowledge of basic calculus and probability a student can use this book to learn about derivatives, interest rates and their term structure and portfolio management. Given these basic tools, it is surprising how high a level of sophistication the authors achieve, covering such topics as arbitrage-free valuation, binomial trees, and risk-neutral valuation.
The reviewer can only congratulate the authors with successful completion of a difficult task of writing a useful textbook on a traditionally hard topic. Throughout the text, the authors invite active reader participation. One way is by opening and closing each chapter with a case study. The authors have embedded all of the exercises in the discussion.
Solutions to all exercises appear in an appendix. This makes the book excellent for self-study. This book provides an excellent introduction to financial engineering. Authors display impressive dexterity in ushering the reader from basics to an understanding of some of the deepest and most far-reaching ideas in the discipline.
Each chapter starts with a case study and ends with a discussion on it using the material taught in the chapter. In general this book provides many examples and exercises, which is very useful for helping readers to understand the materials covered. Overall this is a great book for upper level undergraduate students and those who want to self-study financial engineering.
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