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The Math of Money

Morton D. Davis

Springer Verlag

I really enjoyed reading this book. Although the mathematical level involved never goes beyond basic secondary school mathematics, I was deeply interested from the very first page. I think that this is an excellent book, which gives the reader a clear understanding of certain fundamental ideas about probability and statistics and its applications to betting strategies and basic finance. The material is presented very well. Each chapter begins with a few conceptually interesting problems that test your intuition on the subject. These problems are then fully answered within each chapter.

The author sets out to introduce the mathematics behind interest rates, montages, stocks, bonds and options. What I really enjoyed reading were the chapters that dealt with issues of the psychology of investment and how game theory can be applied to reach financial decisions.

This book is certainly recommended to people that want to apply their basic knowledge in mathematics to their personal finance. However, those who consider themselves experts in this field will probably not be too impressed. Having said that, I think that this book has something to offer to people with a higher level of mathematics who are curious in learning how they can apply their knowledge to basic finance. In fact I would buy this book regardless of the basic mathematics. However I would love to see a more advanced book by Prof. Davis on this subject, written in the same style.

Reviewed by Raffaello Vardavas. Click here to buy this book at Amazon.co.uk.

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