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Quantitative Finance For Dummies

Quantitative Finance For Dummies

Steve Bell

ISBN: 978-1-118-76946-1

Aug 2016

408 pages

In Stock



An accessible, thorough introduction to quantitative finance

Does the complex world of quantitative finance make you quiver? You're not alone! It's a tough subject for even high-level financial gurus to grasp, but Quantitative Finance For Dummies offers plain-English guidance on making sense of applying mathematics to investing decisions. With this complete guide, you'll gain a solid understanding of futures, options and risk, and get up-to-speed on the most popular equations, methods, formulas and models (such as the Black-Scholes model) that are applied in quantitative finance.

Also known as mathematical finance, quantitative finance is the field of mathematics applied to financial markets. It's a highly technical discipline—but almost all investment companies and hedge funds use quantitative methods. This fun and friendly guide breaks the subject of quantitative finance down to easily digestible parts, making it approachable for personal investors and finance students alike. With the help of Quantitative Finance For Dummies, you'll learn the mathematical skills necessary for success with quantitative finance, the most up-to-date portfolio and risk management applications and everything you need to know about basic derivatives pricing.

  • Covers the core models, formulas and methods used in quantitative finance
  • Includes examples and brief exercises to help augment your understanding of QF
  • Provides an easy-to-follow introduction to the complex world of quantitative finance
  • Explains how QF methods are used to define the current market value of a derivative security

Whether you're an aspiring quant or a top-tier personal investor, Quantitative Finance For Dummies is your go-to guide for coming to grips with QF/risk management.

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Introduction 1

Part 1: Getting Started with Quantitative Finance 5

CHAPTER 1: Quantitative Finance Unveiled 7

CHAPTER 2: Understanding Probability and Statistics 27

CHAPTER 3: Taking a Look at Random Behaviours 45

Part 2: Tackling Financial Instruments 65

CHAPTER 4: Sizing Up Interest Rates, Shares and Bonds 67

CHAPTER 5: Exploring Options 85

CHAPTER 6: Trading Risk with Futures 99

Part 3: Investigating and Describing Market Behaviour 119

CHAPTER 7: Reading the Market's Mood: Volatility 121

CHAPTER 8: Analysing All the Data 139

CHAPTER 9: Analysing Data Matrices: Principal Components 159

Part 4: Option Pricing 183

CHAPTER 10: Examining the Binomial and Black-Scholes Pricing Models 185

CHAPTER 11: Using the Greeks in the Black-Scholes Model 209

CHAPTER 12: Gauging Interest-Rate Derivatives 223

Part 5: Risk and Portfolio Management 239

CHAPTER 13: Managing Market Risk 241

CHAPTER 14: Comprehending Portfolio Theory 257

CHAPTER 15: Measuring Potential Losses: Value at Risk (VaR) 275

Part 6: Market Trading and Strategy 291

CHAPTER 16: Forecasting Markets 293

CHAPTER 17: Fitting Models to Data . 313

CHAPTER 18: Markets in Practice 329

Part 7: The Part of Tens 345

CHAPTER 19: Ten Key Ideas of Quantitative Finance 347

CHAPTER 20: Ten Ways to Ace Your Career in Quantitative Finance 355

Glossary 361

Index 369