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Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers' professional and personal knowledge and understanding.
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Fundamentals of Financial Instruments
An Introduction to Stocks, Bonds, Foreign Exchange, and Derivatives
SUNIL PARAMESWARAN
Second Edition

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To my students in India, Australia, Singapore, and the United States over the past 30 years.
Readers the world over have appreciated the first edition of this book, which appeared over a decade ago. Some people pointed out that I should include more material on financial institutions and the key features of the markets in which financial products trade.
Consequently, I have included a detailed chapter on mutual funds, pension funds, and exchange-traded funds. There is also a new chapter on orders and exchanges, which deals with continuous markets in detail, with a brief focus on call markets as well. Macroeconomic issues are key for understanding financial markets, and hence there is a new chapter on such issues. The chapter is by no means exhaustive, and people wishing to acquire a more detailed perspective would have to look for an economics text.
Interest rate derivatives are perhaps the hardest product to explain in futures and options. Consequently, while the book continues to have three separate chapters on futures, options, and swaps, I have opted to include a chapter on interest rate derivatives and on financial products with such derivatives built in, such as callable bonds and putable bonds.
Excel has many useful functions for students and professionals in the field of Finance. I have described the use of many of these functions at key places in the book.
The previous edition had some statistical information on markets, and certain qualitative descriptive features, which I felt were better to remove. I have eliminated such features in the second edition. I feel that a chapter on clearing and settlement may be relevant for the kind of audience that this book aims to address. I will bring that in if and when there is a third edition.
Readers are welcome to share their comments and suggestions with me. Constructive advice and criticism is welcome and will be incorporated while undertaking revision of the material in future. My email is: tarheelconsulting@gmail.com
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