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Tools for Computational Finance offers a clear explanation of computational issues arising in financial mathematics. The new third edition is thoroughly revised and significantly extended, including an extensive new section on analytic methods, focused mainly on interpolation approach and quadratic approximation. Other new material is devoted to risk-neutrality, early-exercise curves, multidimensional Black-Scholes models, the integral representation of options and the derivation of the Black-Scholes equation. New figures, more exercises, and expanded background material make this guide a real must-to-have for everyone working in the world of financial engineering.

"This book is very easy to read and one can gain a quick snapshot of computational issues arising in financial mathematics. Researchers or students of the mathematical sciences with an interest in finance will find this book a very helpful and gentle guide to the world of financial engineering." -- SIAM review (46, 2004)




Tools for Computational Finance offers a clear explanation of computational issues arising in financial mathematics. The new third edition is thoroughly revised and significantly extended, including an extensive new section on analytic methods, focused mainly on interpolation approach and quadratic approximation. Other new material is devoted to risk-neutrality, early-exercise curves, multidimensional Black-Scholes models, the integral representation of options and the derivation of the Black-Scholes equation. New figures, more exercises, and expanded background material make this guide a real must-to-have for everyone working in the world of financial engineering.

"This book is very easy to read and one can gain a quick snapshot of computational issues arising in financial mathematics. Researchers or students of the mathematical sciences with an interest in finance will find this book a very helpful and gentle guide to the world of financial engineering." -- SIAM review (46, 2004)


Content:
Front Matter....Pages I-XIV
Modeling Tools for Financial Options....Pages 1-50
Generating Random Numbers with Specified Distributions....Pages 51-77
Numerical Integration of Stochastic Differential Equations....Pages 79-98
Finite Differences and Standard Options....Pages 99-140
Finite-Element Methods....Pages 141-164
Pricing of Exotic Options....Pages 165-189
Back Matter....Pages 191-227


Tools for Computational Finance offers a clear explanation of computational issues arising in financial mathematics. The new third edition is thoroughly revised and significantly extended, including an extensive new section on analytic methods, focused mainly on interpolation approach and quadratic approximation. Other new material is devoted to risk-neutrality, early-exercise curves, multidimensional Black-Scholes models, the integral representation of options and the derivation of the Black-Scholes equation. New figures, more exercises, and expanded background material make this guide a real must-to-have for everyone working in the world of financial engineering.

"This book is very easy to read and one can gain a quick snapshot of computational issues arising in financial mathematics. Researchers or students of the mathematical sciences with an interest in finance will find this book a very helpful and gentle guide to the world of financial engineering." -- SIAM review (46, 2004)


Content:
Front Matter....Pages I-XIV
Modeling Tools for Financial Options....Pages 1-50
Generating Random Numbers with Specified Distributions....Pages 51-77
Numerical Integration of Stochastic Differential Equations....Pages 79-98
Finite Differences and Standard Options....Pages 99-140
Finite-Element Methods....Pages 141-164
Pricing of Exotic Options....Pages 165-189
Back Matter....Pages 191-227
....
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