200 1_ |a Martingale methods in financial modelling |A Martingale Methods In Financial Modelling |f Marek Musiela, Marek Rutkowski

330 __ |a Let us stress that we have only taken out few sections that， in our opinion， were of marginal importance for the understanding of the fundamental principles of financial modelling of arbitrage valuation of derivatives. In view of the abundance of new results in the area， it would be in any case unimaginable to cover all existing approaches to pricing and hedging financial derivatives （not to mention allimportantresults） in a single book， no matter how voluminous it were. Hence， several intensively studied areas， such as: mean-variance hedging， utility-based pricing， entropybased approach， financial models with frictions （e.g.， short-selling constraints， bidask spreads， transaction costs， etc.） either remain unmentioned in this text， or are presented very succinctly. Although the issue of market incompleteness is not totally neglected，it is examined primarily in the framework of models of stochastic （oruncertain） volatility. Luckily enough， the afore-mentioned approaches and results are covered exhaustively in several excellent monographs written in recent years by our distinguished colleagues， and thus it is our pleasure to be able to refer the interested reader to these texts.