Understanding Financial Engineering: Become the Next Quant

Understanding Financial Engineering is a hands-on introduction to all of the main financial Derivatives and their practical applications. The book bridges the gap between mathematical theory and practice with a focus on educating investors on how to use, value, and monitor derivative positions. The tutorials cover calculating present value of cashflows, futures, swaps, options, credit-default swaps, exotic options, CDO's, Binomial tree valuations, and Monte Carlo Simulations. All examples are available in a dynamic spreadsheet with macros and custom formulas Content: Introduction Chapter 1 – What are Derivatives? Section 1: Financial Calculation Basics Chapter 2– Time Value of Money Chapter 3 – The Yield Curve Section 2: Basic Derivative Instruments Chapter 4 – Futures and Forwards Chapter 5 – Swaps Chapter 6 – Options Chapter 7 – Credit Default Swaps Section 3: Exotic Derivative Instruments Chapter 8 – Binomial Lattices Chapter 9 – Monte Carlo Simulations Chapter 10 – Exotics, CDO’s and Rainbows Section 4: Lessons Learned the Hard Way Chapter 11 – Derivative Disasters Conclusion