Derivatives Markets: International Edition - Couverture souple

Derivatives Markets ROBERT L. MCDONALD

Northwestern University

Derivatives tools and concepts permeate modern finance. An authoritative treatment from a recognized expert, Derivatives Markets 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. 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.

• A 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.

• An applied emphasis. 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.

• A computation-friendly approach. The option 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.

“Derivatives Markets provides a comprehensive yet in-depth treatment of the theory, institutions, and applications of derivatives. McDonald is a master teacher and researcher in the field and makes the reading effortless and exciting with his intuitive writing style and the liberal use of numerical examples and cases sprinkled throughout...(It) is a terrific book, and I highly recommend it.”

“...the most appealing part of the writing is how replete the text is with intuition and how effortless it is woven throughout.”

“...a wonderful blend of the economics and mathematics of derivatives pricing. After reading the book, the student will have not only an understanding of derivatives pricing models but also of derivatives markets...The technical development...brings the student/reader remarkably close to state of the art with carefully chosen and developed mathematical machinery.”

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 Second Edition 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.