Customer Reviews

Introduction to the Economics and Mathematics of Financial Markets

5 star:		(2)
4 star:		(3)
3 star:		(1)
2 star:		(0)
1 star:		(1)

 

 

This book is easier to read than Duffie's Dynamic Asset Pricing Theory and I would say is comparable to that of Bjork's Arbitrage Theory in Continuous-Time. The good thing about this book is that it covers the major topics required for the understanding of financial markets, i.e. stocks, bonds, interest rates, risk, dynamic programming, options, etc. One thing that I did not like is that in the middle of the section they switch for discrete-time to continuous-time and then back and forth again. It would have been better, in my opinion, to do discrete-time as a whole and then a separate section in continuous-time. In addition, the solutions manual that accompany does not seem like it's worth the $20+ you pay for it. It's extremely thin and contains solutions to "some" problems only.

I used this book as a TA for a course in introduction to finance for first-year graduate students last semester. Proofs and mathematical expositions are quite rigorous. The contents cover most of the importan parts in modern theories of finance. It is quite self-contained with introduction to Brownian Motion and Ito's lemma. However, its shortcoming is much like other books in modern advanced economics - it fails to capture the intuition behind those fancy expositions. Although brownian motion, Ito's calculus and fundamental theorems of finance are thoroughly introduced, it fails to explain students the basic ideas behind these concepts. Because I used this book to teach students as a TA, I know that without any guidance students are very likely to be lost in the mathematical expositions in these books. Moreover, this book has a lot of typos! Be careful! Overall, this is quite a good book. The level is appropriate for first-year graduate course in finance. Although the level is appropriate, it is far from being a good textbook.

The book presents many formulas and mathematical derivation of the well known pricing models that we use without even thinking about how they were created and what assumptions they are based upon. You'd be surprised by the number of assumptions we take for granted while they don't really make sense in a practical market.

This is a good textbook for mathematical finance. Surely, it is neither the first book nor the last you should resort to. It shows some mathematical technicalities but limited, which I think of as an advantage. After finishing a first book with intuitive illustrations, you can consult this book before digging into a book making you totally lost.It's comprehensive for upper undergraduate or first year graduate study.I did not use it for introduction, but it did make some blurs conceptually clear to me. I recommend it.

Excellent, highly readable, solid and intuitive. Lucid on all aspects of Math Finance, with both Econ and Math theory in mind. This can be a good replacement for Hull. Not as well known, but I think this is an extended version of Financial Calculus by Baxter and Rennie

too expensive for the contents
only include answers for few questions and not include the last two chapters' questions

It's a basic introduction to the financial market including options, futures and the pricing. I think it is useful.