To further elucidate these complex concepts and formulas, this book also explains in each chapter how theory and practice go hand-in-hand. This volume, a culmination of the author's 12 years of professional experience in the field of finance, derivative analysis and risk management, is a valuable guide for postgraduate students, academics and practitioners in the field of finance.

Contents:

• Derivatives and Asset Pricing in a Discrete-Time Setting: Basic Concepts and Strategies
• Option Pricing in Continuous-Time: The Black–Scholes–Merton Theory and Its Extensions
• Exchange, Forward Start, Chooser Options and Their Applications
• Rainbow Options and Their Applications
• Extendible Options and Their Applications
• Currency Translated Options, Hybrid Securities and Their Applications
• Binaries, Barriers and Their Applications
• Lookback Options, Double Lookback Options and Their Applications
• Asian and Flexible Asian Options and Their Applications
• Steps, Parisian and Static Hedging of Exotic Options
• Value at Risk: Basic Concepts and Applications in Risk Management
• Credit Risk and Credit Valuation: The Basic Concepts
• Credit Derivatives: The Basic Concepts
• Default Risk and the Pricing of Corporate Bonds, Swaps and Options
• Contingent Claims Analysis and Its Applications in Corporate Finance: The Case of Real Options
• Extended Discounted Cash Flow Techniques and Real Options Analysis within Information Uncertainty
• Option Pricing When the Underlying Asset is Non-observable

“Exotic Derivatives and Risk: Theory, Extensions and Applications is a lucid textbook treatment of the principles of derivatives pricing and hedging. At the same time, it is an exhaustively comprehensive encyclopedia of the vast array of exotic options, fixed-income options, corporate claims, credit derivatives, and real options. Written by an expert in the field, Mondher Bellalah's comprehensive and rigorous book is an indispensable reference on any professional's desk.”

“Mondher Bellalah offers a lucid and comprehensive introduction to the important field of modern asset pricing. He offers a step-by-step introduction to this evolving theory starting from its classical foundations. He takes the reader to the frontier by systematically building up the theory. His examples and intuition are splendid and the formal proofs are clearly stated and built on each other. I strongly recommend this book to anyone seeking to gain a deep understanding of the intricacies of asset pricing.”

“This book is well-organized, thoughtful and important to those interested in not only derivative theory but also its applications to solving practical problems.”