Deep Dive into Financial Models

Modeling Risk and Uncertainty

Since 2007, the repeated financial crises around the world have brought to the headlines financial practices and models considered to fuel the economic instabilities. Deep Dive into Financial Models: Modeling Risk and Uncertainty comes handy in demystifying the underlying quantitative finance concepts. With a limited use of mathematical formalism, the book explains thoroughly the models, their hypotheses, principles and other building blocks. A particular care is given to model limitations and their misuse for investment strategies, asset pricing, or risk management. Its reader-friendly nature provides readers with a head start in quantitative finance.

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Contents:

• Interest Rates
• Credit Risk Modeling
• Portfolio Management Theories
• No-arbitrage Theory
• The Black-Scholes Model
• Volatility Models
• Numerical Methods
• Value at Risk (VaR)
• Non-Gaussian Models

Readership: Undergraduate and graduate students who are taking up Quantitative Finance courses and those who possess college mathematical background.
Key Features:

• More emphasis on the founding principles and the consequences of financial models which provides a thorough understanding on the subject
• Numerous reader-friendly and original graphs which help gain an intuitive view on the physical properties of financial concepts
• A critical look on the models as assessed by professional risk managers