Introduction to Financial Math

Contents

• Introduction to Capital Markets
  Learn how money works for borrowers and lenders; meet the players; get an overview of the institutions and instruments that make money available to the institutions that use it
• Financial Math
  Learn key skills for calculating money's value over time through real-life examples and ste-by-step explanations keyed to the HP calculator
  Learn how to set up a problem so that the solutions develops naturally
• Appendix: Basic Algebra
  Been a long time since you factored an expression? Brush up your skill or use this section as a reference as you work the financial math problems
• Appendix: HP Calculator
  Get oriented with this handy guide to the calculator and how to use it for financial math.

Features

• Capital Markets overview puts financial math in context
• "Due Diligence" tests check your understanding
• Warning signs alert you to common pitfalls
• Tips show you the best practices in the markets
• Sprinkled with Wall Street lingo and stories
• Filled with real-life exercises that reinforce each concept
• "The Underwriting" is a final case study that brings all the concepts together in a practical application
• Frequent diagrams illustrate key concepts

Design

• Learn by doing
• A workbook, not a textbook
• Builds the foundation you need to be comfortable with financial math calculations
• Step-by-step learning. Each section contains:
• Concept
  Overview with examples
• The Pitch
  Introductory questiions
• Complexities
  Overview with examples
• The Mandate
  Advanced questions
• Hit the Phones
  Summarizes the section

1. The capital markets
2. Time value of money
3. Compound interest
4. Zero coupon bonds
5. Capital markets players
6. Annuities and perpetuities
7. Coupon bonds
8. Recent developments in the capital markets
9. Irregular cashflows
10. Modified IRR
11. Multiple IRRs
12. All-in-Costs and Yield-to-Maturity
13. Interest rates
14. Simple interest
15. Nominal interest
16. Comparing bonds
17. Holding period yield
18. Constantly growing cash flows

• The Underwriting
• Appendices and answers
• Appendix 1: Using your calculator
• Appendix 2: Algebra brushup
• Answers

This often overlooked book is an excellent introduction to the investment and finance worlds as well as a very practical book on handling the MBA type calculations you often find yourself needing (just kidding).

Buy a HP calculator (obviously) and this book, if you envision a career in the investment world. Recommended reading, even if you don't.

Also part of Financial Business Box.