Discusses the workings of financial markets and over-the-counter (OTC) markets, focusing on standard and complex derivatives. This book covers subjects, which range from the fundamental products in OTC markets, standard and exotic options, the concepts of value at risk, to credit derivatives and risk management.

Derivatives and Asset Pricing in a Discrete-Time Setting: Basic Concepts and Strategies; Option Pricing in Continuous-Time: The Black-Scholes-Merton Theory and Its Extensions; Exchange, Forward Start, Chooser Options and Their Applications; Rainbow Options and Their Applications; Extendible Options and Their Applications; Currency Translated Options, Hybrid Securities and Their Applications; Binaries, Barriers and Their Applications; Lookback Options, Double Lookback Options and Their Applications; Asian and Flexible Asian Options and Their Applications; Steps, Parisian and Static Hedging of Exotic Options; Value at Risk: Basic Concepts and Applications in Risk Management; Credit Risk and Credit Valuation: The Basic Concepts; Credit Derivatives: The Basic Concepts; Default Risk and the Pricing of Corporate Bonds, Swaps and Options; Contingent Claims Analysis and Its Applications in Corporate Finance: The Case of Real Options; Extended Discounted Cash Flow Techniques and Real Options Analysis within Information Uncertainty; Option Pricing When the Underlying Asset is Non-observable.