Money and Mathematics : A Conversational Approach to Modern Financial Mathematics and Insurance

Part I: Income Taxes, Lottery, and Lion Hunting—Elementary Mathematics -- 1. “We Take over Your VAT!” How Big Is the Actual Discount? -- 2. Millions Every Week, but Not for Me. Six Numbers in the Lottery -- 3. Where Did My Money Go? Loss Compensation After a Price Drop -- 4. How Do You Catch a Lion? Finding a Zero by Halving the Interval -- 5. Upside Down and Up Again. How Many Zeros Does a Polynomial Have? -- 6. “According to Adam Ries, that Comes to . . . ” About Fusti, Freight, and Cartage -- 7. How to Invest? The Cost-Average Effect -- 8. § 32a, the Politician and the Coaster. Calculating the Income Tax of a Person -- 9. This Makes the Taxpayer Shudder. What Does “Cold Progression” Actually Mean? -- Part II: Interest Rates, Prices, Yields—Classical Financial Mathematics -- 10. A Fair Deal? Or: There’s Nothing Like Starting Young -- 11. Should I Pay the Bill Quickly? Cash Discount -- 12. The Children of the Interest Rate Are the Grand-Children of the Capital. Compound Interest -- 13. When Will Scrooge McDuck Be Satisfied? The Doubling Problem -- 14. How Real Is Nominal? The Actual Rate of Return on a Principal -- 15. “Have I Learned to Calculate Correctly?” Why Dr. X. from Gifhorn Was Wrong -- 16. “What, I Have to Pay that Long?” Full Repayment of a Loan -- 17. The Widow of the General and the Painter. A Loan à la Chekhov -- 18. Why Does Nominal not Equal Effective? The Effective Interest Rate of an Immediate Loan -- 19. Sandwich with a Car Inside. Financing with Hooks and Eyes -- 20. The Assiduous Clerk. Capital Certificates and Federal Bonds -- 21. 7500 Euros Monthly: A Lifetime. Or Better Yet, Two Millions Right Away? -- 22. Financing a Car with Zero Percent: A Bargain?- 23. Interest Payments Anytime: Isn’t That Wonderful? Continuous Compounding of Interest -- 24. Bearer Bonds and Coupons. Bond Prices and Returns of Bonds -- 25. Oops! A Law Containing Formulas and Numerical Methods? The Calculation of the Effective Interest Rate According to the German Price Indication Ordinance -- Part III: Financial Products and Strategies—Modern Financial Mathematics -- 26. Fair Prices and Market Prices -- 27. The Short End and the Long End. Yield Curves, Spot Rates, and Forward Rates -- 28. Simple as Vanilla Ice Cream. On Standard Financial Products -- 29. Exchanges for Mutual Benefit. Swaps -- 30. The Telescope That Has Been Pushed Together. How to Calculate a Swap Rate? -- 31. Pull out Yourself of the Swamp by Your Own Hair. The Bootstrapping Method -- 32. No Risk, No Fun! Risk Indicators of Fixed-Income Securities -- 33. Sleep Well Despite Turbulent Markets? The Immunization Property of the Duration -- 34. Rising Like a Phoenix from the Ashes. New Shine for Your Depot? -- 35. The Crop of Standing Corn. Are Speculators Really Bad People? -- 36. Orange Juice and Pork Bellies. Forward Transactions -- 37. Empty Pockets and No Money. About Short Sales and No-Arbitrage Portfolios -- 38. Earning Money Without Capital and Risk. Arbitrage Transactions and Fair Prices -- 39. Fibonacci and His Rabbits. A Few Words About Technical Analysis -- Part IV: Only Rights, No Obligations—Options -- 40. A Trip Around the World: Different Types of Options -- 41. Two Triumvirates: From Arbitrage to Speculation -- 42. Nothing Is for Free: The Arbitrage Principle -- 43. How Much Do I Have to Pay for My Right? Option Pricing According to Black and Scholes -- 44. It Takes Two: Option Pricing in the Binomial Model -- 45. Safe Behind the Hedge: Hedging of Stock Positions -- 46. Wrong Calculation—Right Result: Can This Really Be? The Correct Derivation of the Risk Measure Delta -- 47. The Greeks and the Risk: About Risk Indicators for Stock Options -- 48. “In, At and Out of the Money”: The Language of the Actors at the Financial Markets -- 49. Volatility Determines the Option Price—Really? -- 50. Speculating with Options: Rich by Using Leverage? -- Part V: It Is All in the Mix—Portfolio Theory -- 51. A Portfolio of Shares -- 52. Risky Investments: Everything Under Control -- 53. Negative with a Positive Impact: Risk Reduction Using Correlation -- 54. Above Your Needs and Maybe Even More? The CPPI Strategy -- 55. High Risk Pays Off!? Sometimes: On Strategies in Stock Market Games -- Part VI: The Collective Against Risks—Insurance -- 56. A Duo Taming Uncertainty: The Law of Large Numbers and the Central Limit Theorem -- 57. Do You like Classics? A German Life Insurance Concept -- 58. More Opportunities: Dynamic Hybrid Products -- 59. A Million Dollar Roulette in the Financial and Insurance Market? The Monte Carlo Method -- 60. Insurance for Millions–Billions for the Insurer -- 61. CRK: One Number for Risk and Return. Classification of Pension Products -- 62. Living with the Mortality Table -- 63. What Relates Honoré de Balzac and 30 Young Geneva Girls with Life Annuities and Life Tables? -- 64. Sometimes It Clicks and Sometimes Not. A Riester Pension Product with Index Participation -- Part VII: Theoretical Foundations—Classical and Stochastic Financial Mathematics -- Classical Financial Mathematics -- 66. Stochastic Financial Mathematics.