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Get Financial Hacking:Evaluate Risks, Price Derivatives, PDF


Contents:

  • Vanilla World:
    • Risk
    • Arbitrage
    • Trading Puzzles
  • Vanilla Derivatives:
    • Black-Scholes
    • Simulation
    • Puzzles and Bugs
  • Exotic Derivatives:
    • Single-Asset unique Options
    • Multi-Asset unique Options
  • Exotic Worlds:
    • The most sensible exchange within the World?
    • Variance Swaps
    • Esoteric Worlds and Derivatives

Readership: Graduate and learn scholars, finance practitioners and a person keen about the sphere of economic engineering.

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Read Online or Download Financial Hacking:Evaluate Risks, Price Derivatives, Structure Trades, and Build Your Intuition Quickly and Easily PDF

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Additional resources for Financial Hacking:Evaluate Risks, Price Derivatives, Structure Trades, and Build Your Intuition Quickly and Easily

Sample text

Finance is the study of risk, even though risk does not have a perfect definition. You may have thought finance was also the study of money and savings and budgets and loans. There is some of that, but risk is central. The origin of the word apparently traces back to the word “fine,” which related to the completion of a debt or the fulfilling of an obligation. It has the same meaning as one of the oldest words for freedom, the Sumerian “amargi,” which was literally an order to release to their mothers the children that had been held as slaves and collateral on the debt.

Whether you do parametric or non-parametric, you should end up with a negative number, representing, as it does, a loss. When we speak the VaR, however, we omit the negative sign. So we might say the 99 percent 10-day VaR on a $100 million investment in IBM is $10 million, meaning that the most we will lose over a ten-day period, except for one percent of the time, is $10 million. The parametric approach is by far the most common approach in the real world. In addition to its simplicity, it also lets you calculate the VaR's of arbitrary portfolios instantaneously if you know the correlations between all of its components.

You can play and make mistakes here so that when it is time to perform for real, you have gotten all the mistakes out of the way, and done it so thoroughly, that you know how to avoid the common pitfalls even in models and derivatives that are brand new. How Not to Read This Book Do not read this book in a quiet place while sitting alone and concentrating. Trading floors are busy, bustling places with constant interruptions. ; basically, anytime you can be rudely interrupted. It's good training.

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Financial Hacking:Evaluate Risks, Price Derivatives, Structure Trades, and Build Your Intuition Quickly and Easily by Philip Maymin


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