Stochastic Calculus for Finance I: The Binomial Asset Pricing Model (Springer Finance) ISBN-978-0387249681

The first decade of the Carnegie Mellon Professional Master’s degree in Computational Finance served as the foundation for the development of stochastic calculus for finance. Students with a background in calculus and calculus-based probability have found success using the material in this book. The text provides accurate results, reasons for plausibility, and even some proofs, but more significantly, it offers intuitive explanations that have been built and improved through classroom experience with this material. A self-contained study of the probability theory required for stochastic calculus, including Brownian motion and its characteristics, is included in the book. Forward measurements, jump-diffusion processes, and foreign exchange models are examples of advanced subjects.