This book offers a practical answer for the non-mathematician to all the questions any businessman always wanted to ask about risk quantification, and never dare to ask.

Enterprise-wide risk management (ERM) is a key issue for board of directors worldwide. Its proper implementation ensures transparent governance with all stakeholders' interests integrated into the strategic equation. Furthermore, Risk quantification is the cornerstone of effective risk management, at the strategic and tactical level, covering finance as well as ethics considerations. Both downside and upside...

State-of-the-art instruction for understanding and using structured financial products

For financial professionals, the ability to understand the basic design and uses of structured financial products is critical for modern investing, as well as client retention. Derivatives Demystified: Using Structured Financial Products contains up-to-date and in-depth information on a complete range of derivative-based financial instruments.

Critical Praise for Derivatives Demystified

"Derivative financial products are an increasing part of global finance. Braddock narrates us through...

Derivatives have attracted much notoriety as misused and highly risky financial instruments. Losses attributed to these often exotic financial instruments have caused users and practitioners to readdress their focus and look for more authoritative instruction and information on derivatives. This handbook explores the significant case studies on derivative use and examines practical risk management techniques and control issues.

As financial modelling becomes more complicated and deeply dependent upon mathematics, computational finance has become an increasingly popular discipline. This book covers both theoretical and practical aspects, presenting a quantitative approach to risk management. It encompasses the algorithmic and numerical procedures that form the backbone of modern mathematical finance and the creation of financial products.

The foreign exchange market is the largest market in the world, with over a trillion dollars a week flowing through the marketplace. Within this market, currency derivatives have become a prominent trading tool, with large banks, brokerages, hedge funds and trading advisors all utilising them. They are more complicated than ever, yet are integral to managing foreign exchange risk. This text deals with the foreign exchange marketplace with its increasingly complicated products. And has a compendium of 20 articles on currency derivatives, pricing theory and hedging applications.

Equity derivative are future or options on stock or stock indexes. Traditional equity derivatives include warrants, options, futures, and stock index futures. This handbook covers equity index futures and options, and widens the scope of the mathematical discussion on the Black-Scholes model.

Dynamic methods for interest rate risk pricing and hedging.

Fixed-Income Securities provides a survey of modern methods for pricing and hedging fixed-income securities in the presence of interest rate risk. Modern theory of finance provides a wealth of new approaches to the important question of interest rate risk management, and this book brings them together, in a comprehensive and thorough treatment of the subject.

Structured in an accessible manner, the authors begin by focusing on pricing and hedging certain cash flows, before moving on to consider pricing and...

Derivatives markets are continuing to expand all over the world. In particular the over-the-counter market in complex/exotic options is continuing to expand both in volume and complexity. New and more complex options continue to appear and they generally require numerical techniques to price and hedge. This text provides up-to-date coverage of the latest techniques in option modelling, including the Monte Carlo and Binomial methods. It is a source of practical pricing and hedging techniques for complex options, including interest rate exotics.

Defining risk and VAR; regulator and risk management; covarience; calculating VAR using simulation; measurement of volatility and correlation; implementing value at risk; stress testing; managing risk with VAR; risk adjusted performance measurement.

As interest rate markets continue to innovate and expand it is becoming increasingly important to remain up-to-date with the latest practical and theoretical developments. This book covers the latest developments in full, with descriptions and implementation techniques for all the major classes of interest rate models-both those actively used in practice as well as theoretical models still 'waiting in the wings'.

Interest rate models, implementation methods and estimation issues are discussed at length by the authors as are important new developments such as kernel estimation...