Table of Contents

Preface to the Second Edition x

Preface to the First Edition xiii

1 The Quantitative Finance Timeline 1

2 FAQs 21

3 The Financial Modellers’ Manifesto 253

4 Essays 259

5 The Commonest Mistakes in Quantitative Finance: A Dozen Basic Lessons in Commonsense for Quants and Risk Managers and the Traders Who Rely on Them 313

6 The Most Popular Probability Distributions and Their Uses in Finance 383

7 Twelve Different Ways to Derive Black–Scholes 401

8 Models and Equations 429

9 The Black–Scholes Formulæ and the Greeks 453

10 Common Contracts 459

11 Popular Quant Books 483

12 The Most Popular Search Words and Phrases on Wilmott.com 497

13 Brainteasers 507

14 Paul & Dominic’s Guide to Getting a Quant Job 557

Index 579

About the Author

Paul Wilmott has been called "the smartest of the quants, he may be the only smart quant" (Portfolio magazine/Nassim Nicholas Taleb), "cult derivatives lecturer" (Financial Times), "the finance industry's Mozart" (Sunday Business), and "financial mathematics guru" (BBC).