Introduction to Financial Mathematics

Hastings (mathematics, Knox College) perceived a need for an introductory text to financial mathematics, and the result is an excellent book that superbly fits that niche. This clearly written work serves as a bridge to more advanced texts, such as the second edition of Capiński and Zastawniak’s Mathematics for Finance: An Introduction to Financial Engineering (CH, Jun’11, 48-5740). In addition to its clear explanations, this volume emphasizes real problem solving with examples and exercises that challenge students to apply knowledge of basic concepts to new situations. Another unique aspect is the application of discrete probability to finance; the author provides an overview and illustrates problems in which the rates of interest are random variables, instead of traditional problems that consider only known constants. Topics covered include the mathematics of interest, valuation of bonds, discrete probability for finance, portfolio selection, and derivatives. Though the problems in this book can be solved with an advanced calculator, the author suggests using a computational platform, such as Mathematica. There is an electronic version of this text, which can be obtained as a Mathematica notebook. This book is highly recommended for undergraduates and those preparing for actuarial credentialing and exams.–S. J. Chapman Jr., Purdue University NorthWest

Kevin Hastings is Professor of Mathematics; Rothwell C. Stephens Distinguished Service Chair at Knox College. He holds a Ph.D. from Northwestern University. His interests include applications to real-world problems affected by random inputs or disturbances. He is the author or three other books for CRC Press:

Introduction to Probability with Mathematica, 2nd ed., Chapman & Hall/CRC Press, 2009.

Introduction to the Mathematics of Operations Research with Mathematica, 2nd edition, Taylor & Francis/Marcel Dekker, 2006.

Introduction to Probability with Mathematica. CRC Press/Chapman & Hall, November, 2000. Also issued electronically.