A Financial Bestiary - Softcover

Nakisa, Ramin Charles

Softcover

ISBN 10: 0956663508 ISBN 13: 9780956663504

Publisher: Chesham Bois Publishing, 2010

Synopsis

This is an applied book, using the bare minimum of mathematics to give a good understanding of finance. It is ideal for people just starting out in their financial career or those who have some financial experience who want to broaden and refresh their knowledge. A bestiary was a medieval book containing pictures and descriptions of mythical beasts each with its own moral tale to edify the reader. This is a bestiary of finance, and as such starts with a picture book of jobs and traded instruments in finance. Then the "Foundations" section sets out the broad picture of who does what and why in financial markets. Finally there are detailed chapters on financial instruments grouped into sections on "Fixed Income", "Credit", and "Forwards, Futures and Options". The book contains many figures and fully worked exercises to clarify the concepts.

About this title

From the Author:

I love to learn about finance, and this was an opportunity to share what I know with others. Over five years I collected together information about the most fundamental ideas in finance and a list of the most commonly traded financial instruments. Experience teaching at an investment bank helped me hone my ability to explain things simply, and I've tried to put that skill to good use in this book.
"Ramin Nakisa's 'Bestiary' is written with engaging simplicity and considerable clarity, so that the reader is seduced into comprehending complex financial concepts before they realise what is happening to them. It is an essential guide for both the novice trying to understand the world of finance for the first time, and for the seasoned market professional trying to keep track of the ever more Byzantine range of products and concepts."Paul Donovan, Managing Director Global Economics at UBS
Here are a few of the key ideas in the book:

• Who are the players in financial markets, what do they trade and why?
• What is the difference between tracking markets (beta) and outperforming markets (alpha)? 
• What is capital structure, and why does it matter? This crops up in the Big Picture chapter when I describe the difference between equity and bonds, and again in the section on structured credit. This is a good example of ideas spanning seemingly unrelated fields in finance.
• Why does cost of carry matter? Cost of carry explains the difference between spot and forward prices and is crucial to understanding almost all derivative pricing. If you ask many experts to sketch the payoff of a call option they will get it wrong!
• If you want to fully understand an instrument you should be able to price it, or at least have an intuitive grasp of what affects its price. There are many worked pricing examples in the book, including bonds, interest rate swaps, credit default swaps, equity and FX derivatives, variance swaps, synthetic CDOs and others.
• I include rules of thumb for pricing supposedly complex instruments on a beer mat: bonds, credit default swaps and at the money call and put options. It is often crucial to know which way a price will move and roughly how much and these rules let you do the calculations quickly without a spreadsheet.

There are over a hundred diagrams and graphs in the book. If you don't get the equations then the charts give you another way to understand. There are 82 fully worked exercises to help you check whether you really did understand what you read.

Finance is within reach of anyone who is interested to learn. The language and culture of finance is arguably as important as theories and mathematics, so I have tried to include both. I hope that this book gives people an insight that I would have wanted when starting out in finance.

Review:

"Ramin Nakisa's 'Bestiary' is written with engaging simplicity and considerable clarity, so that the reader is seduced into comprehending complex financial concepts before they realise what is happening to them." -Paul Donovan, Managing Director, Global Economics at UBS

About this edition

• Publisher: Chesham Bois Publishing
• Publication date: 2010
• ISBN 10: 0956663508
• ISBN 13: 9780956663504
• Binding: Paperback
• Number of pages: 504