Derivatives: Valuation and Risk Management

I have used Miller & Dubofsky to teach my undergraduate options class in the past and this year I switched to Hull (7th edition). I find that I much prefer the way Miller & Dubofsky is organized. A good example would be the treatment of forwards and futures. Miller & Dubofsky begin with forwards and move on to futures. In Hull they are treated together and this serves to confuse students, especially when it comes to valuation and marking to market. Another strength of the book is that risk management is addressed right away whereas in Hull it seems to be an afterthought. Hull's notation is also quite confusing for students. Hull tries to do everything using continuously compounded rates but for many instruments (FRAs and Interest Rate Swaps for instance) this is not possible. The result is a mish-mash of compounding conventions in the same formula. There are a few weaknesses of the Miller & Dubofsky text as well but these tend to be minor. I think it would benefit by a second edition.

I always wanted to get the solutions for the chapter excercises. It does really help to understand the material . Anyone interested in that can contact at : [email protected]