Table of Contents

Elementary Calculus: Towards Ito's Formula. Elements in Probability. Useful Distributions in Finance. Derivative Securities. Change of Measures and the Pricing of Insurance Products. A Discrete-Time Model for Securities Market. Random Walks. The Binomial Model. A Discrete-Time Model for Defaultable Securities. Markov Chains. Monte Carlo Simulation. From Discrete to Continuous: Towards the Black-Scholes. Basic Stochastic Processes in Continuous Time. A Continuous-Time Model for Securities Market. Term-Structure Models and Interest-Rate Derivatives. A Continuous-Time Model for Defaultable Securities. References. Index.