Presented as a textbook for graduate and advanced undergraduates in finance, economics, mathematics, and statistics; this work presents arbitrage theory and its applications to pricing problems for financial derivatives. Focusing on applications and concrete computations, Bjork (mathematical finance, Stockholm School of Finance, Sweden) primarily uses the theory of stochastic differential equations to develop the math later used for arbitrage pricing of financial derivatives. Advanced calculus and basic knowledge of probability theory are prerequisites. Annotation ©2004 Book News, Inc., Portland, OR