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as a proof of concept, this is the text I get from your jpeg image with Adobe Acrobat OCR :
8 References 1I
bets. This decomposition into building blocks of forwards will significantly
facilitate the valuation of the swap contracr.
7 Conclusions
In this chapter we have reviewed some basic derivative instruments. Our
purpose was twofold: first, to give a brief treatment of the basic derivative
securities so that we can use them in examples; and second, to discuss
some notation in derivative asset pricing, where one first develops pricing
formulas for simple building blocks, such as options and forwards, and then
decomposes more complicated structures into baskets of forwards and options.
This way. pricing formulas for simpler structures can be used to value
more complicated structu red products.
8 References
Hull (1993) is an excellent source on derivatives that is unique in many
ways. Practitioners use it as a manual; beginning graduate students utilize
it as a textbook. Hence, it is both practical and carefully done. Jarrow and
Turnbull (1996) is a welcome addition to books on derivatives. Duffie (1996)
is an excellent source on dynamic asset pricing theory. However, it is not
a SOurce on the details of actual instruments traded in the markets. Yet,
practitioners with a very strong math background may find it useful. Das
( 1995) is a good manual on the practical aspects of derivative instruments.
cheers,
vapo
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