An Introduction to the Mathematics of Finance
A Deterministic Approach

Emphasizes the actuarial dimensions of financial mathematics, with abundant questions and worked examples

Stephen Garrett (Author)

9780081013021, Elsevier Science

Paperback / softback, published 5 May 2016

464 pages
23.4 x 19 x 2.9 cm, 0.96 kg

"The main focus is the theory of compound interest, which is called deterministic financial mathematics by the author...well written and the materials therein are well organized." --Zentralblatt MATH, An Introduction to the Mathematics of Finance "…it offers some very clear explanations of the fundamental building blocks of actuarial work, such as compound interest functions, term structures and discounting…The use of examples and exam questions from the IFoA and the CFA Institute makes this a very valuable study aide…as a primer, it is certainly a success and one which I hope is used by a great many students in the future." --Annals of Actuarial Science, 2014"Stephen Garrett’s new edition of Introduction to the Mathematics of Finance gives an excellent, concise, and thorough treatment of the fundamentals of financial mathematics. By updating the original edition with more emphasis on derivative pricing, this book has become an up-to-date first class textbook on this topic." --P.M. Barrieu, London School of Economics"This 2nd edition will give students excellent support when tackling the Actuarial Profession’s examination in Subject CT1. It is written in a clear and concise way, and a wide range of realistic and relevant examples are provided which make the subject come alive. I will be recommending it to my students." --Ben Rickayzen, Cass Business School "This edition is a timely update to a textbook that for many years was essential reading for actuarial students. It should prove to be a valuable resource for current students taking the CT1 exam." --John Millett, University of Kent "This book contains a set of subjects that will be very close to most actuaries' hearts, being a text book aimed at covering the CT1 syllabus. As an update to McCutcheon and Scott's 1989 An Introduction to the Mathematics of Finance, it offers some very clear explanations of the fundamental building blocks of actuarial work, such as compound interest functions, term structures, and discountingg. As a text for the beginner, this book is perfect....The use of examples and exam questions from both the IFoA and the CFA Institute makes this a very valuable study aide. The fact that the solutions to the large number of exercise questions are also given further increases its usefulness as a primary textbook." --Annals of Actuarial Science 8:1, 2014

An Introduction to the Mathematics of Finance: A Deterministic Approach, Second edition, offers a highly illustrated introduction to mathematical finance, with a special emphasis on interest rates. This revision of the McCutcheon-Scott classic follows the core subjects covered by the first professional exam required of UK actuaries, the CT1 exam. It realigns the table of contents with the CT1 exam and includes sample questions from past exams of both The Actuarial Profession and the CFA Institute. With a wealth of solved problems and interesting applications, An Introduction to the Mathematics of Finance stands alone in its ability to address the needs of its primary target audience, the actuarial student.

1. Introduction2. Theory of Interest Rates3. The Basic Compound Interest Functions4. Further Compound Interest Functions5. Loan Repayment Schedules6. Project Appraisal and Investment Performance7. The Valuation of Securities8. Capital Gains Tax9. Term Structures and Immunization10. An Introduction to Derivative Pricing: Forwards and Futures11. Further Derivatives: Swaps and Options12. An Introduction to Stochastic Interest Rate Models

Subject Areas: Applied mathematics [PBW], Finance [KFF]