Fixed Income Markets and Their Derivatives, Third Edition (Academic Press Advanced Finance)
by: Suresh Sundaresan

Publisher:   Academic Press
Number Of Pages:   448
Publication Date:   2009-03-20
ISBN-10 / ASIN:   0123704715
ISBN-13 / EAN:   9780123704719

Product Description:
The3e of this well-respected textbook continues the tradition of providingclear and concise explanations for fixed income securities, pricing,and markets. The book matches well with fixed income securitiescourses. The book's organization emphasizes institutions in the firstpart, analytics in the second, selected segments of fixed incomemarkets in the third, and fixed income derivatives in the fourth. Thisenables instructors to customize the material to suit their coursestructure and the mathematical ability of their students.
* Newmaterial on Credit Default Swaps, Collateralized Debt Obligations, andan intergrated discussion of the Credit Crisis have been added.
*Online Resources for instructors on password protected website provides worked out examples for each chapter.
* A detailed description of all key financial terms is provided in a glossary at the back of the book.


Summary: The best available introduction to fixed income
Rating: 4
Bachelier's excellent review is spot on, this phrase in particular.
"Sundaresan'FIM&D3 is appropriate for teaching an undergraduate course in fixedincome (both for business and finance majors) and for graduate studentsin generalist MBA programs (but NOT finance MBA)".
Hisbenchmarks are Fabozzi and Martellini et al.; I would like to suggestTuckman as another standard, a book that, in my opinion, does the bestjob on bond math, and, unlike Martellini et al. (which I like bestdespite missing-in-action editing), is suitable for undergrads and MBAstudents.
Nonetheless, for introductory purposes, I wouldreadily pick Sundaresan over Tuckman, favoring "big picture" narrativeand breadth of coverage over math. (Speaking of math, I think thatSundaresan's Excel examples have the best chance of getting a reader totry out a calculation). The choice of Sundaresan over Fabozzi would bea matter of "better less but better", favoring the more concise andbetter-written textbook.
The book's Achilles heel is discussionof rate derivatives. Addressing short-rate models, Sundaresan opts notto go into option-pricing territory, which makes for an "interesting"chapter on caps and floors. It is harder to see why the chapter oninterest-rate swaps does not deliver expected material, including afundamental pricing argument