An Intuitive Introduction to Finance and Derivatives: Concepts, Terminology and Models

This book provides a self-contained, intuitive overview of finance, covering investment risk, market pricing, market efficiency, arbitrage, hedging, and financial derivatives. It is designed for readers new to finance, such as graduate students and financial practitioners.

Format: Hardback
Length: 86 pages
Publication date: 09 March 2023
Publisher: Springer International Publishing AG

This comprehensive book offers a thorough and intuitive exploration of vital financial topics, including investment risk, market pricing and efficiency, arbitrage, hedging, and the pricing and application of financial derivatives. It serves as a foundational introduction, emphasizing intuitive understanding and carefully introducing financial terminology. The book begins with a broad overview of finance and gradually delves into investment theory and derivatives, making it an invaluable resource for readers new to the field, such as graduate students embarking on a finance career or financial practitioners transitioning to a more quantitative role.

Investment risk encompasses the potential losses or gains associated with an investment. It is a fundamental aspect of finance that determines the potential returns on an investment. Different types of investments carry varying levels of risk, and investors must carefully assess and manage these risks to achieve their financial goals.

Market pricing and efficiency are key concepts in finance that explain how financial markets determine the prices of securities. Market efficiency implies that market prices reflect all available information and that prices cannot be manipulated or exploited for short-term gains. Investors must understand market pricing and efficiency to make informed investment decisions.

Arbitrage is a strategy that involves taking advantage of price discrepancies between different markets or securities. It involves purchasing a security at a low price in one market and selling it at a higher price in another market, resulting in a profit without incurring any risk. Arbitrage opportunities are typically identified through careful analysis and market research.

Hedging is a risk management strategy used to protect against potential losses. It involves taking positions in opposite directions in different markets or securities to offset the risk of a negative event. Hedging can be used in various scenarios, such as commodities trading, stock market trading, and foreign exchange trading.

Financial derivatives are instruments that derive their value from underlying assets, such as stocks, bonds, or commodities. They are used for a variety of purposes, including risk management, speculation, and hedging. Financial derivatives are complex and require careful understanding and analysis before being used.

Weight: 319g
Dimension: 235 x 155 (mm)
ISBN-13: 9783031234521
Edition number: 1st ed. 2023