The full text of the book is available from this website. Written in 2001 with updates in 2019. From the 2001 Preface:
The full text of the book is available from this website. Written in 2001 with updates in 2019.
From the 2001 Preface:
A company borrows some money from its bank for two years at an interest rate of 5%. This transaction contains interest-rate risk and credit risk. It might be that the bank is willing to hold one or both of these risks; or it might be that their nature or size prevents the bank from holding either. Financial markets allow the constituent risks in such a transaction to be priced independently, and for those risks to be recombined into forms for which a willing home can be found. Thus the financial markets allow borrowers to raise funds and investors to purchase assets. The various financial instruments enable investors, borrowers and intermediaries to price and transfer different combinations of risk.
During my eight years as an analyst in the financial markets, other researchers and I taught many new colleagues about finance. Pricing Money has grown out of those lectures and tutorials, and describes the basics of the trading of interest rates, including deposits, bonds, futures, swaps, options and foreign exchange. In general, these instruments are well designed for their tasks, and this book emphasises the purpose of each of their features.
Pricing Money should be read by those starting employment in finance, and by those hoping to be employed in finance — consider reading it before rather than after the interview. It will also be useful to those employed in non-financial roles within financial institutions, such as computer programmers, accountants, lawyers, and also to civil servants, corporate treasurers and the interested layman. However, it is a beginner’s book, with few equations, and avoids encyclopedic listings of every detail. Rather, it gives context to those lists that can be found elsewhere. Some of my proof-readers have even said that they want a copy for their spouse: ‘Had a nice day dear? Doing what?’ to which the answer should be ‘This’.
The full text of the book is available from this website. Written in 2001 with updates in 2019.
From the 2001 Preface: