Financial Engineering And Arbitrage In The Financial Markets (the Wiley Finance Series)
by Robert Dubil /
2011 / English / PDF
3.3 MB Download
A whole is worth the sum of its parts. Even the most complex
structured bond, credit arbitrage strategy or hedge trade can be
broken down into its component parts, and if we understand the
elemental components, we can then value the whole as the sum of its
parts. We can quantify the risk that is hedged and the risk that is
left as the residual exposure. If we learn to view all financial
trades and securities as engineered packages of building blocks,
then we can analyze in which structures some parts may be cheap and
some may be rich. It is this relative value arbitrage principle
that drives all modern trading and investment.
A whole is worth the sum of its parts. Even the most complex
structured bond, credit arbitrage strategy or hedge trade can be
broken down into its component parts, and if we understand the
elemental components, we can then value the whole as the sum of its
parts. We can quantify the risk that is hedged and the risk that is
left as the residual exposure. If we learn to view all financial
trades and securities as engineered packages of building blocks,
then we can analyze in which structures some parts may be cheap and
some may be rich. It is this relative value arbitrage principle
that drives all modern trading and investment.
This book is an easy-to-understand guide to the complex world of
today’s financial markets teaching you what money and capital
markets are about through a sequence of arbitrage-based numerical
illustrations and exercises enriched with institutional detail.
Filled with insights and real life examples from the trading
floor, it is essential reading for anyone starting out in
trading.
This book is an easy-to-understand guide to the complex world of
today’s financial markets teaching you what money and capital
markets are about through a sequence of arbitrage-based numerical
illustrations and exercises enriched with institutional detail.
Filled with insights and real life examples from the trading
floor, it is essential reading for anyone starting out in
trading.
Using a unique structural approach to teaching the mechanics of
financial markets, the book dissects markets into their common
building blocks: spot (cash), forward/futures, and contingent
(options) transactions. After explaining how each of these is
valued and settled, it exploits the structural uniformity across
all markets to introduce the difficult subjects of financially
engineered products and complex derivatives.
Using a unique structural approach to teaching the mechanics of
financial markets, the book dissects markets into their common
building blocks: spot (cash), forward/futures, and contingent
(options) transactions. After explaining how each of these is
valued and settled, it exploits the structural uniformity across
all markets to introduce the difficult subjects of financially
engineered products and complex derivatives.
The book avoids stochastic calculus in favour of numeric cash
flow calculations, present value tables, and diagrams, explaining
options, swaps and credit derivatives without any use of
differential equations.
The book avoids stochastic calculus in favour of numeric cash
flow calculations, present value tables, and diagrams, explaining
options, swaps and credit derivatives without any use of
differential equations.