Derivatives Markets 3rd Edition, by Robert L. McDonald, pdf, ebook, download presents the sometimes challenging world of futures, options, and other derivatives in an accessible, cohesive, and intuitive manner. Some features of the book include insights into pricing models. Formulas are motivated and explained intuitively.

To be financially literate in today’s market, business students must have a solid understanding of derivatives concepts and instruments and the uses of those instruments in corporations. The book has an accessible mathematical presentation, and more importantly, helps students gain intuition by linking theories and concepts together with an engaging narrative that emphasizes the core economic principles underlying the pricing and uses of derivatives.

Links between the various derivative instruments are highlighted. Students learn how derivatives markets work, with an emphasis on the role of competitive market-makers in determining prices. This book also offers tiered approach to mathematics. Most of the book assumes only basic mathematics, such as solving two equations in two unknowns.

The last quarter of the book uses calculus, and provides an introduction to the concepts and pricing techniques that are widely used in derivatives today. Chapters on corporate applications, financial engineering, and real options illustrate the broad applicability of the tools and models developed in the book. A rich array of examples bolsters the theory.

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This book offers computation-friendly approach. The options pricing functions used in the text are available in accompanying Excel spreadsheets. Visual Basic code for the pricing functions is included, and can be modified for your own use.

Table of Contents

## Table of Contents

Preface

Chapter 1 Introduction to Derivatives

PART ONE INSURANCE, HEDGING, AND SIMPLE STRATEGIES

Chapter 2 An Introduction to Forwards and Options

Chapter 3 Insurance, Collars, and Other Strategies

Chapter 4 Introduction to Risk Management

PART TWO FORWARDS, FUTURES, AND SWAPS

Chapter 5 Financial Forwards and Futures

Chapter 6 Commodity Forwards and Futures

Chapter 7 Interest Rate Forwards and Futures

Chapter 8 Swaps

PART THREE OPTIONS

Chapter 9 Parity and Other Option Relationships

Chapter 10 Binomial Option Pricing: Basic Concepts

Chapter 11 Binomial Option Pricing: Selected Topics

Chapter 12 The Black-Scholes Formula

Chapter 13 Market-Making and Delta-Hedging

Chapter 14 Exotic Options: I

PART FOUR FINANCIAL ENGINEERING AND APPLICATIONS

Chapter 15 Financial Engineering and Security Design

Chapter 16 Corporate Applications

Chapter 17 Real Options

PART FIVE ADVANCED PRICING THEORY AND APPLICATIONS

Chapter 18 The Lognormal Distribution

Chapter 19 Monte Carlo Valuation

Chapter 20 Brownian Motion and Ito’s Lemma

Chapter 21 The Black-Scholes-Merton Equation

Chapter 22 Risk-Neutral and Martingale Pricing

Chapter 23 Exotic Options: II

Chapter 24 Volatility

Chapter 25 Interest Rate and Bond Derivatives

Chapter 26 Value at Risk

Chapter 27 Credit Risk

Appendixes

App. A The Greek Alphabet

App. B Continuous Compounding

App. C Jensen’s Inequality

App. D An Introduction to Visual Basic for Applications

Glossary

References

Index

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## Product Details

ASIN : B00SLSEPT0

Publisher : Pearson (July 23, 2013)

Best Sellers Rank: #1,876,082 in Books (See Top 100 in Books)

Customer Reviews: 4.1 out of 5 stars 39 ratings

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