Dalton B. Financial Products: An Introduction Using Mathematics and Excel

New York, "Cambridge University Press", 2008, -407p.Financial Products provides a step-by-step guide to some of the most important ideas underpinning financial mathematics. It describes and explains interest rates, discounting, arbitrage, risk neutral probabilities, forward contracts, futures, bonds, FRA and swaps. It shows howto construct both elementary and more complex (Libor) zero curves. Options are described, illustrated and then priced using the Black–Scholes formula and binomial trees. Finally, there is a chapter describing default probabilities, credit ratings and credit derivatives (CDS, TRS,CSO and CDO). An important feature of the book is that it explains this range of concepts and techniques in away that can be understood by those with a basic understanding of algebra. Many of the calculations are illustrated using Excel spreadsheets, as are some of the more complex algebraic processes. This accessible approachmakes it an ideal introduction tofinancial products for undergraduates and those studying for professional financial qualifications.Bill Dalton was Head of the Mathematics Department at Harrow School, 1978–1998. He retired in 2006 and now writes and lectures part-time in financial mathematics.