An Introduction to the Mathematics of Financial Derivatives

I really appreciate the gentle introduction into the subject, however, the book is absolutely riddled with errors and inconsistencies in notation. I got up to page 30, and have so far encountered multiple errors per page (!) on average. This makes studying an already tricky subject needlessly frustrating. The book desperately needs some careful editing!

Style of the book is very useful , its does outline some complex topics in good ways with good details. BUT and its a big but I'm afraid , the editing of this book has gone completely awry. Lots of misprints and mistakes In formulas. Can get around it if you really really concentrate but its supposed to teach not require correction. The answer book is the same , questions left out and mistakes . In the main text book , P219 has the Black and Scholes formula wrong !! That's fairly poor. That said the the way the topics are presented is very good. Don't think the author is at fault here but maybe the publisher >]>?

Excellent book by leading authority

One the best text books for beginners. It explains abstract mathematical theories with easy to understand language and examples. For example, one does not need to have advanced math background to understand chapter 14 which covers Equivalent Martingale Measures (the Girsanov Theorem) and chapter 24 which covers stopping time for American options. Chapter 24 is especially interesting in the sense that it uses simple theory and example to layout steps one can use to determine the optimal (best) time to exercise American options. The new chapters 22 (Pricing Derivatives via Fourier Transform Technique), 23 (Credit Spread and Credit Derivatives) and 25 (Overviews of Calibration and Estimation Techniques) are great addition to the previous (second) edition. Chapters 22 and 25 introduce more advanced methods and models for pricing and predicting future prices for derivative products. Chapter 23 gives an in-depth introduction to credit derivative.

Full of typos.. Even equation numbers referred to in the text is not correct at many places, leading me to guess the intent. The book is good, but these typos and errors make it harder to read. An explicit errata for this book is awaited.

Bottom line: awfully written and not didactic AT ALL. Content is good, but it's very confusing. They mention concepts before they are introduced, leaving you to guess / research what they mean. Besides, they are very bad at introducing / explaining these new concepts.Finally, there are many errors, be it typos (specially inside equations) or simply bad English. I strongly recommend you buy another book on the subject.