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Derivatives Markets, 2/E
Robert L. McDonald, Northwestern University

ISBN-10: 032128030X
ISBN-13: 9780321280305

Publisher: Prentice Hall
Copyright: 2006
Format: Cloth; 912 pp
Published: 12/15/2005
Status: Instock

Net price: $145.50 (What's this?)

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To be financially literate in today’s market, business students must have a solid understanding of derivatives concepts and instruments and the uses of those instruments in corporations. The Second Edition has an accessible mathematical presentation, and more importantly, helps students gain intuition by linking theories and concepts together with an engaging narrative that emphasizes the core economic principles underlying the pricing and uses of derivatives.

Concrete Applications complement the pricing discussions. Chapters on financial engineering, corporate applications, and real options all address practical problems.
An emphasis on core economic principles helps students develop a deeper, more intuitive understanding of derivatives markets and instruments. For example, the idea that options are a form of insurance is presented at the outset.
Integrated treatment of forward contracts and options. The initial chapters cover both forwards and options, illustrating how they are used and incorporating an extended example of hedging by gold-mining and gold-buying firms. This approach helps to unify option pricing; in particular, it makes it clear that the formula for pricing stock options is the same as the formula for pricing currency options.
Formulas are motivated, placed in context, and explained intuitively. The goal is to help students build intuition about pricing models through their applications so they can know when a price does not make sense and why. The author provides the student with a framework for thinking about commonality among various derivative instruments.
The Theme of Applied Computation is emphasized. Using the pre-programmed Excel spreadsheets that are packaged with the book, students can become more comfortable and fluent with pricing models and their use in spreadsheets, even before they understand the precise mathematical underpinnings.

A new chapter on Credit Risk examines the burgeoning market in credit default swaps and related products.
A new chapter on Volatility covers volatility estimation, hedging and pricing options with stochastic volatility.
An all-new problems book with solutions for every chapter is available to supplement problems in the book.
Enhanced option pricing software.
A case book is available for instructors who wish to incorporate cases in their teaching. Choose to package McDonald’s text with the well-respected Risk Takers: Uses and Abuses of Financial Derivatives by John Marthinsen. Risk Takers profiles seven real-life situations in which financial derivatives resulted in fabulous success or spectacular failure while also exploring some everyday uses of derivatives, such as stock options. Beyond simple case studies, this book fully explores the events, providing context and discussing outcomes.

Chapter 1 Introduction to Derivatives

Part I Insurance, Hedging, and Simple Strategies

Chapter 2 An Introduction to Forwards and Options

Chapter 3 Insurance, Collars, and Other Strategies

Chapter 4 Introduction to Risk Management

Part II Forwards, Futures, and Swaps

Chapter 5 Financial Forwards and Futures

Chapter 6 Commodity Forwards and Futures

Chapter 7 Interest Rates Forwards and Futures

Chapter 8 Swaps

Part III Options

Chapter 9 Parity and Other Option Relationships

Chapter 10 Binomial Option Pricing: I

Chapter 11 Binomial Option Pricing: II

Chapter 12 The Black-Scholes Formula

Chapter 13 Market-Making and Delta-Hedging

Chapter 14 Exotic Options: I

Part IV Financial Engineering and Applications

Chapter 15 Financial Engineering and Security Design

Chapter 16 Corporate Applications

Chapter 17 Real Options

Part V Advanced Pricing Theory

Chapter 18 The Lognormal Distribution

Chapter 19 Monte Carlo Valuation

Chapter 20 Brownian Motion and Ito’s Lemma

Chapter 21 The Black-Scholes Equation

Chapter 22 Exotic Options: II

Chapter 23 Interest Rate Models

Chapter 24 Risk Assessment

Chapter 25 Credit Risk

Chapter 26 Volatility

Derivatives [CORE TEXTS] (Finance)
Options and Futures [CORE TEXTS] (Finance)

Companion WebSite, 2/E
McDonald
©2006 | Prentice Hall | Website | Instock
ISBN-10: 0321286448 | ISBN-13: 9780321286444

Online Computerized Test Bank, 2/E
McDonald
©2006 | Prentice Hall | Electronic Supplement | Instock
ISBN-10: 0321286413 | ISBN-13: 9780321286413
Online purchase price: $80.00 View Downloadable Files

Online Instructor's Solutions Manual, 2/E
McDonald
©2006 | Prentice Hall | Electronic Supplement | Instock
ISBN-10: 032128643X | ISBN-13: 9780321286437
Online purchase price: $80.00 View Downloadable Files

Online PowerPoints, 2/E
McDonald
©2006 | Prentice Hall | Electronic Supplement | Instock
ISBN-10: 0321286421 | ISBN-13: 9780321286420
View Downloadable Files

Online Test Bank, 2/E
McDonald
©2006 | Prentice Hall | Electronic Supplement | Instock
ISBN-10: 0321286405 | ISBN-13: 9780321286406
Online purchase price: $80.00 View Downloadable Files

Companion WebSite, 2/E
McDonald
©2006 | Prentice Hall | Website | Instock
ISBN-10: 0321286448 | ISBN-13: 9780321286444

Practice Problems and Solutions, 2/E
Fahlenbrach
©2006 | Prentice Hall | Paper; 198 pp | Instock
ISBN-10: 0321318129 | ISBN-13: 9780321318121
Net price: $35.00 (What's this?)

Solutions Manual for Even Numbered Problems, 2/E
McDonald
©2006 | Prentice Hall | Paper; 178 pp | Instock
ISBN-10: 0321286472 | ISBN-13: 9780321286475
Net price: $35.00 (What's this?)

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©2002 | Prentice Hall | CD-ROM Only | Instock
ISBN-10: 0130606189 | ISBN-13: 9780130606181
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Addison-Wesley
©2004 | Prentice Hall | Paper | Instock
ISBN-10: 0321267001 | ISBN-13: 9780321267009
Suggested retail price: $0.00Net price: $0.00 (What's this?)

Companion WebSite, 2/E
McDonald
©2006 | Prentice Hall | Website | Instock
ISBN-10: 0321286448 | ISBN-13: 9780321286444

This package contains:
• McDonald, Derivatives Markets & Risk Takers Package (2006)

Pearson Higher Education offers special pricing when you choose to package your text with other student resources. If you're interested in creating a cost-saving package for your students, browse our available packages below, or contact your Pearson Higher Education representative to create your own package.

Package ISBN-10: 0321422783 | ISBN-13: 9780321422781
©2006 | Instock
Suggested retail price: $194.00 Buy from myPearsonStore
Net price: $145.50 (What's this?)
This package contains:

Derivatives Markets, 2/E

Risk Takers: Uses and Abuses of Financial Derivatives

Package ISBN-10: 0321436059 | ISBN-13: 9780321436054
©2006 | Instock
Suggested retail price: $200.67 Buy from myPearsonStore
Net price: $150.50 (What's this?)
This package contains:

Derivatives Markets, 2/E

Solutions Manual for Even Numbered Problems, 2/E