1 The Binomial No-Arbitrage Pricing Model. - 1. 1 One-Period Binomial Model. - 1. 2 Multiperiod Binomial Model. - 1. 3 Computational Considerations. - 1. 4 Summary. - 1. 5 Notes. - 1. 6 Exercises. - 2 Probability Theory on Coin Toss Space. - 2. 1 Finite Probability Spaces. - 2. 2 Random Variables Distributions and Expectations. - 2. 3 Conditional Expectations. - 2. 4 Martingales. - 2. 5 Markov Processes. - 2. 6 Summary. - 2. 7 Notes. - 2. 8 Exercises. - 3 State Prices. - 3. 1 Change of Measure. - 3. 2 Radon-Nikodým Derivative Process. - 3. 3 Capital Asset Pricing Model. - 3. 4 Summary. - 3. 5 Notes. - 3. 6 Exercises. - 4 American Derivative Securities. - 4. 1 Introduction. - 4. 2 Non-Path-Dependent American Derivatives. - 4. 3 Stopping Times. - 4. 4 General American Derivatives. - 4. 5 American Call Options. - 4. 6 Summary. - 4. 7 Notes. - 4. 8 Exercises. - 5 Random Walk. - 5. 1 Introduction. - 5. 2 First Passage Times. - 5. 3 Reflection Principle. - 5. 4 Perpetual American Put: An Example. - 5. 5 Summary. - 5. 6 Notes. - 5. 7 Exercises. - 6 Interest-Rate-Dependent Assets. - 6. 1 Introduction. - 6. 2 Binomial Model for Interest Rates. - 6. 3 Fixed-Income Derivatives. - 6. 4 Forward Measures. - 6. 5 Futures. - 6. 6 Summary. - 6. 7 Notes. - 6. 8 Exercises. - Proof of Fundamental Properties of Conditional Expectations. - References. Language: English