The Mathematics of Finance (Pure and Applied Undergraduate Texts) [Hardcover]

Victor Goodman and Joseph Stampfli (Author)

Book Description

Publication Date: March 10, 2009 | ISBN-10: 0821847937 | ISBN-13: 978-0821847930

This book is ideally suited for an introductory undergraduate course on financial engineering. It explains the basic concepts of financial derivatives, including put and call options, as well as more complex derivatives such as barrier options and options on futures contracts. Both discrete and continuous models of market behavior are developed in this book. In particular, the analysis of option prices developed by Black and Scholes is explained in a self-contained way, using both the probabilistic Brownian Motion method and the analytical differential equations method. The book begins with binomial stock price models, moves on to multistage models, then to the Cox-Ross-Rubinstein option pricing process, and then to the Black-Scholes formula. Other topics presented include Zero Coupon Bonds, forward rates, the yield curve, and several bond price models. The book continues with foreign exchange models and the Keynes Interest Rate Parity Formula, and concludes with the study of country risk, a topic not inappropriate for the times. In addition to theoretical results, numerical models are presented in much detail. Each of the eleven chapters includes a variety of exercises. An instructor's manual for this title is available electronically. Please send email to [e-mail] for more information.

Editorial Reviews

Review

[T]he book is a worthwhile contribution to the literature…Its main strength is that it provides an introduction to mathematical finance at a level that is not too technical. Indeed, it is very successful in achieving this outcome….[P]rospective undergraduate students of financial mathematics will find life much easier by reading [this] book. --Kam Fong Chan, Pacific Accounting Review

Product Details

• Hardcover: 250 pages
• Publisher: American Mathematical Society (March 10, 2009)
• Language: English
• ISBN-10: 0821847937
• ISBN-13: 978-0821847930
• Product Dimensions: 10.2 x 7.2 x 0.8 inches
• Shipping Weight: 1.5 pounds (View shipping rates and policies)
• Average Customer Review: 2.5 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #1,079,599 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

3 of 3 people found the following review helpful:

4.0 out of 5 stars Better than the competition, November 2, 2009

By 

anjuwaa - See all my reviews

This review is from: The Mathematics of Finance (Pure and Applied Undergraduate Texts) (Hardcover)

We were provided with a list of books for an undergraduate introductory course in mathematical finance which included books from Ross, Joshi, Hull, and this. I find this to be rather complete and comprehensive than the above mentioned. Its much easier to digest than the Ross and Joshi books. Even though Hull's book explains the concepts a little thoroughly, I find it kind of vague for a math major, Hull's is definitely the best for a finance major. Only drawback about this book is that it does not have enough practice problems but neither the other books.

1 of 2 people found the following review helpful:

1.0 out of 5 stars horrible, November 19, 2010

By 

rajan S. (NewJersey) - See all my reviews

Amazon Verified Purchase

This review is from: The Mathematics of Finance (Pure and Applied Undergraduate Texts) (Hardcover)

this book is really bad. in fact, our teacher decided that she wont ever use this book. although chapters 2-4 are really good, the rest of the material is so bad. the authors completely hand wave everything and make some assumptions without proofs. on top of that, there are so many errors in the book it is just something amazing. sometimes, i dont even know if i am correct or wrong in my reasoning because the answers are wrong to many problems on the page. i just dont understand how you can talk about pricing a call option without an understanding of geometric brownian motion? there is no part in the book where it explains geometric brownian motion. also, there is no payoff diagram. what the heck. no material on arbitrage with put call parity or anything. honestly, very poorly written. i am glad these guys retired.