Includes index.

Business snapshots -- Preface -- Introduction -- Financial institutions and their trading -- Banks -- Insurance companies and pension plans -- Mutual funds and hedge funds -- Appendix a: compounding frequencies and interest rates -- Appendix b: zero rates, forward rates, and zero-coupon yield curves -- Appendix c: valuing forward and futures contracts -- Appendix d: valuing swaps -- Appendix e: valuing european options -- Appendix f: valuing american options -- Appendix g: taylor series expansions -- Appendix h: eigenvectors and eigenvalues -- Appendix i: principal components analysis -- Appendix j: manipulation of credit transition matrices -- Appendix k: valuation of credit default swaps -- Appendix l: synthetic cdos and their valuation -- Answers to questions and problems -- Glossary of terms -- Derivagem software.

Further Reading; Practice Questions and Problems (Answers at End of Book); Further Questions; Part One Financial Institutions and Their Trading; 2 Banks; 2.1 Commercial Banking; 2.2 The Capital Requirements of a Small Commercial Bank; 2.2.1 Capital Adequacy; 2.3 Deposit Insurance; 2.4 Investment Banking; 2.4.1 IPOs; 2.4.2 Dutch Auction Approach; 2.4.3 Advisory Services; 2.5 Securities Trading; 2.6 Potential Conflicts of Interest in Banking; 2.7 Todays Large Banks; 2.7.1 Accounting; 2.7.2 The Originate-to-Distribute Model; 2.8 The Risks Facing Banks; Summary; Further Reading.