Best Financial Mathematics Books

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List of Top 10 Financial Mathematics Books

Mathematical Finance, also known as quantitative finance, is applied mathematics where analysts solve real-life cases and problems by creating models, taking observed market prices as input. Below is the list of top 10 books on Mathematical Finance.

  1. The Concepts and Practice of Mathematical Finance ( Get this book )
  2. Method of Mathematical Finance  ( Get this book )
  3. Mathematical Finance: A Very Short Introduction ( Get this book )
  4. An Introduction to Mathematical Finance With Applications ( Get this book )
  5. Probability for Finance ( Get this book )
  6. Problems and Solutions in Mathematical Finance ( Get this book )
  7. The Model Thinker ( Get this book )
  8. An Introduction To The Mathematics Of Finance ( Get this book )
  9. Elementary Probability Theory ( Get this book )
  10. Maths for Finance ( Get this book )

Let us discuss each of the Mathematical Finance books in detail, along with its key takeaways and reviews.

Best Financial Mathematics Books

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#1 – The Concepts and Practice of Mathematical Finance

Author: Mark S. Joshi

The Concepts and Practice of Mathematical Finance (Mathematics, Finance and Risk, Series Number 8)

Financial Mathematics Book Review:

An excellent book by an Indian writer, Joshi produces an introductory study material on the pricing of financial instruments like derivativesDerivativesDerivatives in finance are financial instruments that derive their value from the value of the underlying asset. The underlying asset can be bonds, stocks, currency, commodities, etc. The four types of derivatives are - Option contracts, Future derivatives contracts, Swaps, Forward derivative contracts. read more and underlying securities. He also explains the methods to implement financial modelsFinancial ModelsFinancial modeling refers to the use of excel-based models to reflect a company's projected financial performance. Such models represent the financial situation by taking into account risks and future assumptions, which are critical for making significant decisions in the future, such as raising capital or valuing a business, and interpreting their impact.read more along with their usage.

Key Takeaways For This Best Financial Mathematics Book:

  • The book covers important concepts of Black Scholes, stochastic volatility, jump-diffusion, variance, and many more.
  • The theoretical concepts are backed by practical examples.
  • Challenges your mind and motivates you to learn quantitative finance.
<< Get this book >>

#2 – Method of Mathematical Finance

Author: Loannis Karatzas

Methods of Mathematical Finance (Stochastic Modelling and Applied Probability)

Financial Mathematics Book Review:

The book is an extraordinarily intelligent work of Loannis about mathematical finance. He mainly targets the mathematically sounded crowd that knows probability and stochastic concepts but is not familiar with its application in finance.

Key Takeaways For This Top Financial Mathematics Book:

  • The book includes theorems and proofs of modern mathematical methods.
  • It includes two financial revolutions of the late 20th century.
  • Learn to create portfolios with the largest mean return (subjective of risk)
<< Get this book >>

#3 – Mathematical Finance

A Very Short Introduction

Author: Mark H.A. Davis

Mathematical Finance: A Very Short Introduction (Very Short Introductions)

Financial Mathematics Book Review:

The book is a comprehensive overview of the use of applied mathematics in the finance industry. The finance industry has evolved as the most important branch of modern economics, and thus it creates limitless opportunities for quantitative analystsOpportunities For Quantitative AnalystsA quantitative analyst is a mathematical and statistical specialist who applies methods to derive solutions for management and financial risks. The best careers in quantitative analyst are - statistical analyst, front office quantitative analyst, risk management officer, model validation.read more.

Key Takeaways For This Best Financial Mathematics Book:

  • Introduction and usage of arbitrage theory in pricing financial contracts.
  • Explore the development of mathematics in finance.
  • People, even with little knowledge about statistics and calculus, can benefit from this book.
<< Get this book >>

#4 – An Introduction to Mathematical Finance With Applications

Understating and Building Financial Intuition

Author: Arlie O. Petters

An Introduction to Mathematical Finance with Applications: Understanding and Building Financial Intuition (Springer Undergraduate Texts in Mathematics and Technology)

Financial Mathematics Book Review:

The book is an all in one complete learning set that offers the theoretical methods and their proper derivation and tons of examples and problems to get practical understanding. The book is an introductory source that targets undergraduate students of finance. Develop a foundation in applied mathematics applicable in finance.

Key Takeaways For This Top Financial Mathematics Book:

<< Get this book >>

#5 – Probability for Finance

Author: Ekkehard Kopp

Probability for Finance (Mastering Mathematical Finance)

Financial Mathematics Book Review:

A comprehensive guide that offers rigorous and unfussy content to both students and professionals. Kopp mainly focuses on the concepts of Probability necessary for understanding the financial markets.

Key Takeaways For This Best Financial Mathematics Book:

  • Book offers essential material to study modern finance.
  • It is loaded with examples and exercises for self-evaluation.
  • Free from jargon text provides a simplified learning course.
<< Get this book >>

#6 – Problems and Solutions in Mathematical Finance

Author: Eric Chin

Problems and Solutions in Mathematical Finance: Stochastic Calculus (The Wiley Finance Series)

Financial Mathematics Book Review:

The book covers the application of advanced mathematical techniques. Eric says the existence of quantitative finance is based on concepts and theories of applied mathematics like probability, statistics, stochastic process, etc.

Key Takeaways For This Top Financial Mathematics Book:

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#7 – The Model Thinker

What You Need to Know to Make Data Work for You

Author: Scott E. Page

The Model Thinker: What You Need to Know to Make Data Work for You

Financial Mathematics Book Review:

Data is the basic requirement for the growth and existence of every industry. Whether it is the stock market or E-commerce industry or census figures, data plays a key role. Now data analyst has to extract the required and meaningful out of the raw data and produce verifiable results. The book shows you how to do this.

Key Takeaways For This Best Mathematical Finance Book:

  • Enhance your analytical reach with quantitative finance.
  • Learn mathematical, statistical, and computational models.
  • Learn to analyze data and make accurate predictions.
<< Get this book >>

#8 – An Introduction To The Mathematics Of Finance

Author: Stephen Garret

Mathematics for Finance: An Introduction to Financial Engineering (Springer Undergraduate Mathematics Series)

Financial Mathematics Book Review:

Book follows a deterministic approach (i.e. development of future states of the system excluding randomness) and produces a complete introductory guide about mathematical finance. The book especially focuses on interest rates and its calculations.

Key Takeaways For This Best Financial Mathematics Book:

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#9 – Elementary Probability Theory

With Stochastic Processes and an Introduction to Mathematical Finance

Author: Koi Lai Chung

Elementary Probability Theory: With Stochastic Processes and an Introduction to Mathematical Finance (Undergraduate Texts in Mathematics)

Financial Mathematics Book Review:

The book discusses the theories of probabilities. Chung says probabilities have always been one of the most important topics of mathematics. The topic has evolved into a discipline and now has direct interaction over fields of data analysis and quantitative mathematics.

Key Takeaways For This Top Financial Mathematics Book:

  • Book targets the students of mathematics. Learn probability and its application in the finance industry.
  • The latest edition includes two additional chapters on applied mathematics.
<< Get this book >>

#10 – Maths for Finance

An Introduction to Financial EngineeringFinancial EngineeringFinancial engineering is field which uses mathematical techniques, financial theories, engineering tools and advanced programming techniques to solve critical and complex financial problems.read more

Author: Marek Capinski and Tomas Zastawniak

Mathematics for Finance: An Introduction to Financial Engineering (Springer Undergraduate Mathematics Series)

Financial Mathematics Book Review:

The book offers fundamental and introductory knowledge about calculus and probability. It covers three important areas of finance and its mathematical applications, which include option pricing, Markowitz portfolio optimizationPortfolio OptimizationPortfolio optimization refers to the strategic process of making improvements or positive changes to the investor's portfolio containing various assets. The Sharpe ratio helps to analyze the returns from an optimal portfolio.read more, and Capital Asset Pricing Model.

Key Takeaways For This Top Financial Mathematics Book:

  • An excellent reference to acquire introductory mathematical knowledge.
  • Learn stochastic interest rate models.
  • Book offers various financial concepts along with practical examples.
<< Get this book >>

Here is the list of Top 10 Financial Mathematics Books. These books bring a fresh and innovative approach to the concepts of Mathematical Finance. You may refer to the following books to learn more –

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