Customer Reviews

The Oxford Guide to Financial Modeling: Applications for Capital Markets, Corporate Finance, Risk Management and Financial Institutions

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

 

 

Most textbooks on financial modeling are devoted to describing specific models, such as those for stocks, bonds, or options, or to their specific applications such as arbitrage trading and portfolio management. Few books describe the financial principles behind the models and tie the models to business solutions.

The Oxford Guide to Financial Modeling by Thomas S.Y. Ho and Sang Bin Lee (yes, the authors of the Ho-Lee model, the first arbitrage-free interest rate model) successfully ties the thought processes and applications of the financial models together and describes them as one process which provides business solutions. The authors very ably explain all the models used in finance, take the financial theory and modeling to the next level and develop a business model framework that integrate the fields of corporate finance, fixed income, derivatives, and Asset & Liability management.

Each chapter begins by introducing a practical problem. The financial models that provide solutions to the problem are then described. The chapter concludes with how the models can be applied. Because of the nature of the material on financial models, the book presents many results as mathematical formulations, yet the text is very enjoyable as the more rigorous mathematical derivations are deferred to the appendices and to the epilogue.

What really makes The Oxford Guide to Financial Modeling a brilliant educational project and just not another excellent textbook is the companion web site that serves as an interactive workbook designed specifically for the book. The site is designed to further enhance understanding of the use and applications of the models referred to in the book and it is accessible free of charge.

The reviews of this book seem to fall into two categories: those that are suspect and those that are harsh. I have at least another partial perspective to contribute.

I don't own this book. I am in a computational finance masters degree program and I spend a lot of money on books as it is. But I would definitely consider buying this book. I recently had to solve a homework problem on using lattice pricing to price a "Chooser option" (sometimes called an as-you-like-it option). This option can be converted to a put or a call at some time T. I wrote software that properly generated the strike price, and the call and put prices in the lattice. But I was not sure what the next step was. This book has an very readable very good section on lattice pricing of Chooser options. After reading this I was able to finish the software and get the right answer. Google limits the amount that you can see, but looking over other material it looks like there are other excellent sections on lattice pricing for other instruments.

So having read through some of this book I can attest that at least some sections are excellent. Fortunately you can take a look at the book, either on Amazon or Google and decide for yourself.

I got this book about a week ago. What a treat! This book gives comprehensive and in-depth descriptions on a variety of most popular topics: financial modeling, valuing different financial instruments, US and international financial market structures, trading strategies, and many more. I think due to authors' math background, sophiscated math finance students like me find this book even more intriguing -- we can actually see how mathematic theories are applied in the market to price different exotic instruments. Yet this book is also written simple enough so MBA students (or even advanced college students) can gain comprehensive knowledge of how financial market really works.

Also, don't forget to check out this book's website. It contains all the models discussed in the book. Everything is already coded in excel and vb, and ready to use. Best of all, it is FREE!

This book can very well open the next page of the financial engineering revolution. In additional to all the information provided by Hall's book, this book systematically discusses financial modeling procedures for existing financial instruments, and develops a framework to extend current research to accommodate future scenarios. I think the most impressive part of the book is the discussion about how equities (like SUBX and JDSU) can be valued as embedded bond options given their debt structures and earning powers. The industry-standard literatures use much more crude and subjective methodologies such as WAC and discounted cashflow.

The authors of this book are also the creator of Ho-Lee model. Therefore it is not surprising to find extremely detailed explanations on virtually all the interest rate and bond models. If your career aspirations is to become a bond trader or a quant in general, this book is a must read!

"Hodge-podge" is the first term that comes to mind after reading this book. The breadth of topics is notable, but the material itself is far from satisfactory as applied to the real world. If someone offers to pay you to read this book, it would be worth reading. Also, please note that several five-star reviews were written professionally for promotional purposes.

I am afraid that the 3 reviewrs before me are the same person.
Amazon makes it quite easy for promotional wizards to do that so sales can be increased.
So far there is not even one review that tackes or critisizes this book. Are we all that perfect or should we become a victims of made up book?

The field of quantitative financial modeling, young as it is, has seen a massive explosion of published books in recent times. While it may appear that there is now a wealth of literature on financial modeling out there, the sad reality is it has become very difficult to find well-written comprehensive books. Dr T. S. Y. Ho and Prof S. B. Lee's book is in my opinion the most comprehsive book on financial modeling since J. Hull's book. Their book even takes a big step further than John Hull in setting a mathematical framework for consistent valuation of derivatives, corporate liabilities and valuation of firms (Corporate Finance).
This is a an excellent book for researchers, practitioners and students alike. Readers will benefit from a wealth of academic and industrial experience of the two authors, which is very well portrayed in every section of the book. In addition to the book they provide a free interactive website (www.thomasho.com) where one can be more intimate with the financial models discussed in book. One may recall that Dr Ho and Prof Lee are the authors of the Ho-Lee model.

Ho and Lee's book is not bad, but not as good as Hull's book. First, this book tries to include everything, making it not easy to learn for beginners. Second, the definition in this book is not very clear as hull's book. Third, after reading the book, I really don't know what are models for and how to implement these models; hence, I still have to refer these model from Hull's book.