"A masterful presentation of the many risk exposures embedded in the fast growing world of rate, credit and equity hybrid products by leading scholars. The handbook is an essential addition for those venturing into the intricate details of pricing and risk managing the complexities of cross...

Probability statements about future evolutions of financial and actuarial risks are expressed in terms of the ‘real-world' probability measure P, whereas in an arbitrage-free environment, the prices of these traded risks can be expressed in terms of an equivalent martingale measure Q. The...

In arbitrage-free but incomplete markets, the equivalent martingale measure Q for pricing traded assets is not uniquely determined. A possible approach when it comes to choosing a particular pricing measure is to consider the one that is 'closest' to the physical probability measure P, where...