Customer Rating: 
Summary: What a good one!
Comment: I got this book few months back, though little pricy but someone recommended it. I found it to be a wonderful blend of the economics and mathematics of derivatives pricing. After reading the book, i was comfortable with :
understanding of derivatives pricing models &
derivatives markets
I strongly recommend people giving their FRM, CFA and / or SOA certifications to get their hands on this book.
You would like it. A good reference book. Only issue is it is little too heavy, hence you cannot lie down and read it for a long time ;-)
Customer Rating:
Summary: Book is good; Price is not
Comment: I was recommended this text book by the study material I was using to prepare the acturial exam FM. Then I came to check this book here and I found out that the price here is way too much higher. With this price, you can buy both the text book and its solution mannual in Actex Mad River with free UPS shipping. Hope this will help.
Customer Rating:
Summary: advanced, comprehensive treatment
Comment: As financial instruments become ever more complex, McDonald's book gives a systematic treatment of the most common forms of derivatives. Providing a unified etymology that can help you understand how they work.
He groups options (puts and calls) with forward contracts like zero coupon bonds. Through numerous simple payoff graphs, as well as explanatory accompanying text, the ideas are easily grasped. The book starts with these ideas in its early chapters. Then it builds on them, to illustrate associated and often more elaborate constructs, as in insurance strategies for hedging.
Nor is the discussion confined to minimising one's risk. There is an alternative method, of deliberately speculating on volatility, for example.
The modelling of futures and options pricing is dealt with in detail. Including the seminal Black-Scholes formula and related analysis. The assumptions behind Black-Scholes are examined in detail, given the crucial influence of this on many types of pricing. The treatment gets rather advanced, invoking ideas like Monte Carlo simulations of stock prices.
The text is well suited for a graduate program in finance.
Customer Rating:
Summary: Very concise, focus on intuition
Comment: As an MBA student at Kellogg School, I find this book is concise and easy to read. It also teaches me the intuition in derivatives and asset pricing. As it has both basic and advanced material, it can be used as a reference book as well.
Customer Rating:
Summary: Excellent for final year undergraduate or postgrads
Comment: I have used this book as text for my final year undergraduates majoring in Finance and the response is great ! The students love it as the writing is clear and most chapters provide enough working examples for independent learning. The mathematical portions in this text are very crucial for understanding derivatives and this is where i think the author scores highly, given his background from MIT !
The later chapters (Chapter 15 onwards) in Part 4 and 5 are more advanced and more suitable for postgraduate studies, which i would love to explore more but unfortunately did not have much time to explore as an undergraduate lecturer.
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