Aimed at providing an introduction to fundamental concepts and mathematical foundations essential for studying dynamics of financial markets, this volume focuses on stochastic processes and the manner in which they provide the basic framework for modeling the markets. Key Feautres: l The book is mathematical in nature, but is not heavy on proofs l Contains many examples l Simulations and analysis of real data from different financial markets

Introduction / Probability Theory (A Brief Review) / Random Variables and Probability Theory / Derivatives and No Arbitrage Assumption / Distribution Law for a Sum of Independent Random Variables /Stochastic (or Random) Processes / Two Specific Stochastic Processes / Stochastic Calculus / The Black-Scholes Model / Statistical Analysis of Data / Going Beyond the Black-Scholes Model / Appendix A / References / Index

Graduate & Postgraduate Students, Market Managers, Statisticians