An Introduction to Mathematical Finance with Applications

This textbook provides a comprehensive introduction to mathematical finance, ideal for students and professionals seeking a deeper understanding of financial models.

This textbook, An Introduction to Mathematical Finance with Applications, serves as a bridge between theoretical concepts and practical applications in finance. It is particularly useful for mathematicians, physicists, and engineers who seek to develop their financial intuition through a structured approach to model building. The authors emphasize the importance of understanding the derivation of formulas rather than merely applying them, which enhances the reader's grasp of essential financial ideas and tools. This foundational knowledge is crucial for constructing realistic financial models, including those that may be proprietary in nature.

Designed for advanced undergraduates and first-year graduate students, An Introduction to Mathematical Finance with Applications does not assume prior knowledge of finance. Instead, it requires a solid background in multivariable calculus, probability, and linear algebra. The authors introduce additional mathematical concepts as needed throughout the text. The course structure is flexible, allowing instructors to tailor the material to fit a year-long introductory course on mathematical finance or focus on specific topics such as financial derivatives.

With numerous examples and exercises, this book reinforces conceptual understanding and practical application. The exercises are thoughtfully categorized into conceptual, application-based, and theoretical problems, encouraging deeper exploration of the material. Overall, this textbook is an excellent resource for anyone looking to gain a rigorous understanding of the mathematical models used in finance.