Book Info
Presents the sometimes challenging world of futures, options, and other derivatives in an accessible, cohesive, and intuitive manner. Includes insights into pricing models, a tiered approach to mathematics, and an applied emphasis.

From the Back Cover
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. ADVANCE PRAISE FROM THE MARKET “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.” —Geroge Constantinides University of Chicago “...the most appealing part of the writing is how replete the text is with intuition and how effortless it is woven throughout.” —Ken Kavajecz University of Pennsylvania “...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.” —Mark Cassano University of Calgary

FROM THE PUBLISHER

The goals of this book include accessibility to a broad range of students and practitioners, a narrative thread tying the topics together, and an emphasis on the economics of markets and pricing. This book provides a quantitative treatment of derivatives that builds intuition in an accessible framework. McDonald's focus is on how to analyze and value derivatives. The book features include insights into pricing models, a tiered approach to mathematics, an applied emphasis, and a computation-friendly approach. This book is suitable for practitioners and students who want to develop a working knowledge of how to analyze and value derivatives. It is also suitable for advanced undergraduates and both introductory and advanced derivatives courses at the MBA level.

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