Binding: Hardcover
Dewey Decimal Number: 332.645
EAN: 9780131470200
ISBN: 0131470205
Label: Wharton School Publishing
Manufacturer: Wharton School Publishing
Number Of Items: 1
Number Of Pages: 224
Publication Date: October 15, 2005
Publisher: Wharton School Publishing
Sales Rank: 158884
Studio: Wharton School Publishing

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Editorial Review:

Product Description:
Arbitrage is central both to corporate risk management and to a wide range of investment strategies. Thousands of financial executives, managers, and sophisticated investors want to understand it, but most books on arbitrage are far too abstract and technical to serve their needs. Billingsley addresses this untapped market with the first accessible and realistic guide to the concepts and modern practice of arbitrage. It relies on intuition, not advanced math: readers will find basic algebra sufficient to understand it and begin using its methods. The author starts with a lucid introduction to the fundamentals of arbitrage, including the Laws of One Price and One Expected Return. Using realistic examples, he shows how to identify assets and portfolios ripe for exploitation: mispriced commodities, securities, misvalued currencies; interest rate differences; and more. You'll learn how to establish relative prices between underlying stock, puts, calls, and 'riskless' securities like Treasury bills -- and how these techniques support derivatives pricing and hedging. Billingsley then illuminates options pricing, the heart of modern risk management and financial engineering.He concludes with an accessible introduction to the Nobel-winning Modigliani-Miller theory, and its use in analyzing capital structure.




Rating: - Beautiful job
In this short but highly interesting book the author discusses a concept that it is fair to say is an axiom of modern finance: the principle of arbitrage. Even though this principle is not without controversy and has been hotly debated in recent financial research literature, its use in deriving some of the main results in mathematical finance, such as the Black-Scholes equation, is undisputed. To derive the Black-Scholes equation requires somewhat formidable mathematics, and even though it is used, ... Read More

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Rating: - Well-known financial concepts
“This book traces the common thread binding together much of financial thought – arbitrage. Distilled to its essence, arbitrage is about identifying mispricing and developing strategies to exploit it. An inherently simple concept – the act of exploiting different prices for the same asset or portfolio – arbitrage is as important as it is commonly misunderstood. This is because arbitrage is so often presented in financial arguments that are long on technical detail but short on economic intuition. ... Read More

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Rating: - Outstanding book on profitable arbitrage
Here is another outstanding book published by the Wharton School, the nation's first collegiate business school, dedicated to publishing books that will have the highest value and impact on the theory and practice of business and management. Randall S. Billingsley, Ph.D., CRRA, CFA distills financial arbitrage to its essence: identifying mispricing and developing strategies to exploit it.

The discussion on arbitrage is often long on technical detail but short on economic intuition. Drawing ... Read More

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Rating: - Learn the fundamentals of arbitrage and where it occurs
Over the years, I have heard of hedge funds and the principal of arbitrage, but until I read this book, I had no idea what they really were. The fundamental definition of arbitrage is where there is an unjustifiable difference in the price of an asset in two separate markets. When this is the case, one can buy in the low market and sell in the high market with no risk whatsoever. Furthermore, the investment is being carried out with someone else's money.
That by itself is easy to understand, but there ... Read More

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Rating: - Very helpful for someone looking for help in understanding how the principles of arbitrage are used to set prices
Arbitrage is one of those words that many people use with only a vague sense of what it means and the vague sense is too often wrong. Many believe it has to do with some kind of crooked speculation in the stock market. In reality, it is a very important idea that allows prices to be set for bonds, stocks, futures contracts, and all kinds of other things.

The basic idea is that if you could go into your local grocery store and see ketchup being actively purchased for $10 a bottle, but you could also ... Read More

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