Book description
In recent times, derivatives have been inaccurately labelled the
financial weapons of mass destruction responsible for the worst
financial crisis in recent history. Inherently complex and perilous for
the ill-informed investment professional they can however also be
gainfully harnessed.
This book is a practical guide to the complexities of exotic products
written in simple terms based on the premise that derivatives are not
homogenous, and not necessarily dangerous.
By exploring common themes behind the construction of various
structured products in interest rates, equities and foreign exchange,
and investigating the economic environment that promoted the explosive
growth of these products, this book will help readers make sense of
their relevance in this period of economic uncertainty. Subsequently,
by explaining exotic products with simple mathematics, it will aid
readers in understanding their potential use in certain investment
strategies whilst having a firm control over risk.
Exotic products need not be inaccessible. By understanding the
products available investors can make informed decisions ensuring
features are consistent with their investment objectives and risk
preferences. Author Chia Chiang Tan takes readers through the risks
and rewards of each product, illustrating when products can damage
investment strategies and how to avoid them, leading to suitable,
profitable investments.
Ultimately, this book will provide practitioners with an
understanding of derivatives, enabling them to determine for
themselves which products will fit their investment strategy, and how
to use them based on the economic environment and inherent risks.
CHIA CHIANG TAN is currently a quantitative
analyst in Global Markets at Deutsche Bank. Prior to this he has held
positions at CIBC, Barclays Capital and Dresdner Kleinwort. His work
has spanned a multitude of asset classes, including interest rates,
equities and foreign exchange. In his various roles, he has seen
first-hand how a myriad of derivatives solutions have emerged to
satisfy client demands resulting from the prevailing economic
environment, as well as how some of these purported solutions have at
times gone badly wrong. Chia has an undergraduate degree in
Mathematics from University College London and a Master of
Mathematical Finance from the University of Toronto.
