This book covers the theory of derivatives pricing and hedging as well as techniques used in
mathematical finance. The authors use a top-down approach starting with fundamentals before
moving to applications and present theoretical developments alongside various exercises
providing many examples of practical interest.A large spectrum of concepts and mathematical
tools that are usually found in separate monographs are presented here. In addition to the
no-arbitrage theory in full generality this book also explores models and practical hedging
and pricing issues. Fundamentals and Advanced Techniques in Derivatives Hedging further
introduces advanced methods in probability and analysis including Malliavin calculus and the
theory of viscosity solutions as well as the recent theory of stochastic targets and its use
in risk management making it the first textbook covering this topic. Graduate students in
applied mathematics with an understanding of probability theory and stochastic calculus will
find this book useful to gain a deeper understanding of fundamental concepts and methods in
mathematical finance.
