Quantitative Methods for Finance and Investments

Preface. Acknowledgments. 1. Introduction and Overview:. The Importance of Mathematics in Finance. Mathematical and Computer Modeling in Finance. Money, Securities, and Markets. Time Value, Risk, Arbitrage, and Pricing. The Organization of this Book. 2. Review of Elementary Mathematics: Functions and Operations:. Introduction. Variables, Equations, and Inequalities. Exponents. The Order of Arithmetic Operations and the Rules of Algebra. The Number e. Logarithms. Subscripts. Summations. Double Summations. Products. Factorial Products. Permutations and Combinations. Exercises. Appendix: An Introduction to the ExcelT Spreadsheet. 3. A Review of Elementary Mathematics: Algebra and Solving Equations:. Algebraic Manipulations. The Quadratic Formula. Solving Systems of Equations that Contain Multiple Variables. Geometric Expansions. Functions and Graphs. Exercises. Appendix: Solving Systems of Equations on a Spreadsheet. 4. The Time Value of Money:. Introduction and Future Value. Simple Interest. Compound Interest. Fractional Period Compounding of Interest. Continuous Compounding of Interest. Annuity Future Values. Discounting and Present Value. Present Value of a Series of Cash Flows. Annuity Present Values. Amortization. Perpetuity Models. Single--stage Growth Models. Multiple--stage Growth Models. Exercises. Appendix: Time Value Spreadsheet Applications. 5. Return, Risk, and Co--movement:. Return on Investment. Geometric Mean Return on Investment. Internal Rate of Return. Bond Yields. An Introduction to Risk. Expected Return. Variance and Standard Deviation. Historical Variance and Standard Deviation. Covariance. The Coefficient of Correlation and the Coefficient of Determination. Exercises. Appendix: Return and Risk Spreadsheet Applications. 6. Elementary Portfolio Mathematics:. An Introduction to Portfolio Analysis. Portfolio Return. Portfolio Variance. Diversification and Efficiency. The Market Portfolio and Beta. Deriving the Portfolio Variance Expression.

John L. Teall is Professor of Finance at Pace University. He has published numerous articles in scholarly journals and has served on university faculties around the world. Dr Teall is a former member of the American Stock Exchange and has done consulting work for many of the worlda s leading financial institutions. Iftekhar Hasan is Professor of Finance at the New Jersey Institute of Technology. He has published numerous articles in academic journals and has been associated with several universities and regulatory organizations in Europe. He is the co--editor of Research in Banking and Finance.

"This excellent text patiently guides the reader through a wide array of mathematics, ranging from elementary matrix algebra to differential and integral calculus. The quantitative methods are illustrated with a rich and captivating assortment of applications to the analysis of portfolios, derivatives, exchange, fixed income instruments, and equities. Undergraduate and MBA--level students who have read this book will feel comfortable with the mathematics in their finance courses and their professors can focus on teaching finance as it should be taught." Kose John, Stern School of Business, New York University <1----end----> "This volume provides a comprehensive review of mathematics which will prove invaluable for students of finance. It is a reference book for the nonmathematician and a clear and concise text that will help fill the gaps in studentsa knowledge. Although the topic is quantitative methods, the organization, emphasis, applications, and numerous examples are all geared to the student of finance. Having Teall and Hasan on your bookshelf provides an essential safety net for students, teachers, and practitioners." Paul Wachtel, Stern School of Business, New York University