(eBook PDF) Quantitative Finance: A Simulation-Based Introduction Using Excel – Digital Ebook – Instant Delivery Download

Product details:

• ISBN-10 ‏ : ‎ 143987168X
• ISBN-13 ‏ : ‎ 978-1439871683
• Author:  Matt Davison

Quantitative Finance: A Simulation-Based Introduction Using Excel provides an introduction to financial mathematics for students in applied mathematics, financial engineering, actuarial science, and business administration. The text not only enables students to practice with the basic techniques of financial mathematics, but it also helps them gain significant intuition about what the techniques mean, how they work, and what happens when they stop working.

After introducing risk, return, decision making under uncertainty, and traditional discounted cash flow project analysis, the book covers mortgages, bonds, and annuities using a blend of Excel simulation and difference equation or algebraic formalism. It then looks at how interest rate markets work and how to model bond prices before addressing mean variance portfolio optimization, the capital asset pricing model, options, and value at risk (VaR). The author next focuses on binomial model tools for pricing options and the analysis of discrete random walks. He also introduces stochastic calculus in a nonrigorous way and explains how to simulate geometric Brownian motion. The text proceeds to thoroughly discuss options pricing, mostly in continuous time. It concludes with chapters on stochastic models of the yield curve and incomplete markets using simple discrete models.

Table contents:

1. Introduction
2. Intuition about uncertainty and risk
3. The classical approach to decision making under uncertainty
4. Valuing investment opportunities: the discounted cash flow method
5. Repaying loans over time
6. Bond pricing with default: using simulations
7. Bond pricing with default: using difference equations
8. Difference equations for life annuities
9. Tranching and collateralized debt obligations
10. Bond CDOs: more than two bonds, correlation, and simulation
11. Fundamentals of fixed income markets
12. Yield curves and bond risk measures
13. Forward rates
14. Modeling stock prices
15. Mean variance portfolio optimization
16. A qualitative introduction to options
17. Value at risk
18. Pricing options using binomial trees
19. Random walks
20. Basic stochastic calculus
21. Simulating geometric Brownian motion
22. Black Scholes PDE for pricing options in continuous time
23. Solving the Black Scholes PDE
24. Pricing Put options using Put Call Parity
25. Some approximate values of the Black Scholes Call Formula
26. Simulating Delta hedging
27. Black Scholes with Dividends
28. American options
29. Pricing the perpetual American Put and Call
30. Options on multiple underlying assets
31. Interest rate models
32. Incomplete markets

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