Overview
- Promotes critical thinking skills to develop intuition about financial options
- Highlights the mathematical concepts fundamental to finance by offering an intuitive approach
- Offers instructors potentially new to the area a valuable resource for teaching a mathematical finance course
- Simplifies complex mathematical concepts, such as the derivation of the Black–Scholes equation and its solutions, by emphasizing the concepts behind a formula
- Includes supplementary material: sn.pub/extras
Part of the book series: Undergraduate Texts in Mathematics (UTM)
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Table of contents(9 chapters)
Keywords
- Mathematics of finance
- Mathematical finance
- Mathematical finance textbook
- Mathematical finance Donald Saari
- Mathematical finance capstone
- Mathematical finance intuition
- Intuitive mathematical finance
- Undergraduate mathematical finance
- Mathematics and economics textbook
- Calls puts finance
- Black-Scholes formula
- Black-Scholes model
- Black-Scholes equation
- Efficient market hypothesis
- The Greeks finance
- Embellishments finance
- quantitative finance
About this book
This textbook invites the reader to develop a holistic grounding in mathematical finance, where concepts and intuition play as important a role as powerful mathematical tools. Financial interactions are characterized by a vast amount of data and uncertainty; navigating the inherent dangers and hidden opportunities requires a keen understanding of what techniques to apply and when. By exploring the conceptual foundations of options pricing, the author equips readers to choose their tools with a critical eye and adapt to emerging challenges.
Introducing the basics of gambles through realistic scenarios, the text goes on to build the core financial techniques of Puts, Calls, hedging, and arbitrage. Chapters on modeling and probability lead into the centerpiece: the Black–Scholes equation. Omitting the mechanics of solving Black–Scholes itself, the presentation instead focuses on an in-depth analysis of its derivation and solutions. Advanced topics that follow include the Greeks, American options, and embellishments. Throughout, the author presents topics in an engaging conversational style. “Intuition breaks” frequently prompt students to set aside mathematical details and think critically about the relevance of tools in context.
Mathematics of Finance is ideal for undergraduates from a variety of backgrounds, including mathematics, economics, statistics, data science, and computer science. Students should have experience with the standard calculus sequence, as well as a familiarity with differential equations and probability. No financial expertise is assumed of student or instructor; in fact, the text’s deep connection to mathematical ideas makes it suitable for a math capstone course. A complete set of the author’s lecture videos is available on YouTube, providing a comprehensive supplementary resource for a course or independent study.
Reviews
“This textbook provides excellent tools for a holistic understanding of mathematical finance, which combine intuitive common sense with financial and mathematical concepts. The book appeared as notes for undergraduates from a variety of backgrounds, from mathematics and computer science to economics and finance.” (Nikita Y. Ratanov, Mathematical Reviews, August, 2020)
Authors and Affiliations
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Departments of Economics and Mathematics, University of California, Irvine, USA
Donald G. Saari
About the author
Donald G. Saari is Emeritus Professor of Mathematics and Economics at the University of California, Irvine. His contributions to voting theory, economics, and celestial mechanics are widely celebrated, and his achievements include election to the U.S. National Academy of Sciences and the Chauvenet Prize for mathematical exposition. His books Geometry of Voting and Basic Geometry of Voting are celebrated for their seminal contributions to mathematical voting theory.
Bibliographic Information
Book Title: Mathematics of Finance
Book Subtitle: An Intuitive Introduction
Authors: Donald G. Saari
Series Title: Undergraduate Texts in Mathematics
DOI: https://doi.org/10.1007/978-3-030-25443-8
Publisher: Springer Cham
eBook Packages: Mathematics and Statistics, Mathematics and Statistics (R0)
Copyright Information: Springer Nature Switzerland AG 2019
Softcover ISBN: 978-3-030-25442-1Published: 11 September 2019
eBook ISBN: 978-3-030-25443-8Published: 31 August 2019
Series ISSN: 0172-6056
Series E-ISSN: 2197-5604
Edition Number: 1
Number of Pages: XVII, 144
Number of Illustrations: 16 b/w illustrations
Topics: Quantitative Finance, Game Theory, Economics, Social and Behav. Sciences, Finance, general, Macroeconomics/Monetary Economics//Financial Economics