This manual offers comprehensive coverage of the syllabus for Exam MFE/3F. In its 26 lessons, the following topics are reviewed:
•Put-call parity
•Binomial trees
•Modeling stock prices with the lognormal distribution
•The Black-Scholes formula
•Exotic options
•Monte Carlo valuation
•Brownian motion and Ito’s lemma
•Interest rate models, including the Black-Derman-Toy model
The 9th edition has over 800 pages, about 120 examples and 90 in-lesson excercises, and about 450 end-of-lesson exercises, all with complete solutions. Also, the manual has 11 original 30-question practice exams (an additional 330 questions), with detailed solutions. While this manual will be adequate for Exam MFE/3F, the McDonald textbook is referenced in each lesson if you wish to use it.
The 9th edition 4th printing incorporates corrections to all errata known at the date of publication.
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