1st Edition
by M. J. Alhabeeb (Author)
An introduction to the mathematical skills needed to understand finance and make better financial decisions
Mathematical
Finance enables readers to develop the mathematical skills needed to
better understand and solve financial problems that arise in business,
from small entrepreneurial operations to large corporations, and to also
make better personal financial decisions. Despite the availability of
automated tools to perform financial calculations, the author
demonstrates that a basic grasp of the underlying mathematical formulas
and tables is essential to truly understand finance.
The book
begins with an introduction to the most fundamental mathematical
concepts, including numbers, exponents, and logarithms; mathematical
progressions; and statistical measures. Next, the author explores the
mathematics of the time value of money through a discussion of simple
interest, bank discount, compound interest, and annuities. Subsequent
chapters explore the mathematical aspects of various financial
scenarios, including:
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Mortgage debt, leasing, and credit and loans
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Capital budgeting, depreciation, and depletion
-
Break-even analysis and leverage
-
Investing, with coverage of stocks, bonds, mutual funds, options, cost of capital, and ratio analysis
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Return and risk, along with a discussion of the Capital Asset Pricing Model (CAPM)
-
Life annuities as well as life, property, and casualty insurance
Throughout
the book, numerous examples and exercises present realistic financial
scenarios that aid readers in applying their newfound mathematical
skills to devise solutions. The author does not promote the use of
financial calculators and computers, but rather guides readers through
problem solving using formulas and tables with little emphasis on
derivations and proofs.
Extensively class-tested to ensure an
easy-to-follow presentation, Mathematical Finance is an excellent book
for courses in business, economics, and mathematics of finance at the
upper-undergraduate and graduate levels. The book is also appropriate
for consumers and entrepreneurs who need to build their mathematical
skills in order to better understand financial problems and make better
financial choices.
