<p><a href="http://a.co/eMCTSvj" rel="nofollow noreferrer">Dynamic Asset Pricing Theory</a>, by Darrell Duffie.</p>

<p>This book seems to be referred to a lot. It's very thorough. In my experience, it might be a little to difficult for a introduction to the topic. However, it is a good reference. </p>

CC BY-SA 3.0
2017-08-11T00:36:40.937Z
2017-08-11T00:36:40.937Z
jmbejara
<p><a href="http://a.co/ev5Ywe4" rel="nofollow noreferrer">Financial Asset Pricing Theory</a>, by Claus Munk.</p>

<p>This book takes a nice approach in that each chapter repeats the material 3 times: in discrete time with a discrete state space, in discrete time with a continuous state space, and in continuous time with a continuous state space. This makes it easy to see how each relates to the others. Also, it helps the reader to focus on the underlying concepts rather than the mathematical artifacts of each individual setting.</p>

<p>I like Cochrane's book a lot for the intuitions that it provides. In my opinion, Munk's book is very useful as a complement to Cochrane's book. Munk's book provides a lot of the mathematical clarity that I feel is less clear in Cochrane's book.</p>

CC BY-SA 3.0
2017-08-11T00:30:28.257Z
2017-08-11T00:30:28.257Z
jmbejara
<p>If you are looking for something simpler before jumping to Black-Scholes, consider the textbook "<a href="http://www.mheducation.com/highered/product/investments-bodie-kane/0077861671.html" rel="nofollow noreferrer">Investments</a>" from Bodie, Kane, and Marcus.</p>

<p>You can look at the <a href="http://www.mheducation.com/highered/product/investments-bodie-kane/0077861671.toc.html" rel="nofollow noreferrer">table of contents</a>. The book assumes that the reader does not know stochastic calculus and continuous time finance, but it still gets to the Black-Scholes formula.</p>

CC BY-SA 3.0
2017-07-11T18:36:54.987Z
Ty for your answer. I've covered that book quite thoroughly and have a pretty good knowledge on derivative products from the book "Options, Futures, and Other Derivatives" from Hull. What I was looking for was a book with the geometric state-space representation of contigent markets that leads to the derivation of concepts such has complete markets, 1st and 2nd fundamental theorems of finance, etc
RAGMS
CC BY-SA 3.0
2017-07-11T18:00:29.637Z
2017-08-11T07:45:25.957Z
2017-08-11T07:45:25.957Z
Gustavo Amarante
<p>I am going to complete a continuous time finance course in  the upcoming semester. Although all my higher education is in economics I have not encountered a financial economics setting of contingent markets,i.e, of the geometric representation of the state space of the aforementioned. I have a solid knowledge on investments, financial markets and financial products such as derivatives but I was looking for the mathematical finance formulation of contingent markets. What introductory book would be good for an introduction in the simpler settings before jumping to the Black-Scholes setting for example which is the end-goal of the class I am going to take. Cochrane's book "Asset Pricing" is similar to what I am looking for but I would like to know if there are any alternatives.</p>

CC BY-SA 3.0
2017-08-11T00:26:19.163Z
With these types of questions, we usually like to limit the answers to one book per answer. See here: https://economics.stackexchange.com/questions/471/graduate-level-textbook-on-labor-economics-and-macro-labor
jmbejara
CC BY-SA 3.0
2017-08-11T00:37:41.303Z
This question might be a duplicate. See here: https://economics.stackexchange.com/questions/11205/financial-economics-textbooks?rq=1 . It seems, however, that this question is more focused on asset pricing than on financial economics in general.
jmbejara
<reference-request><financial-economics><asset-pricing>
Introductory book for asset pricing and financial economics
RAGMS
# Introductory book for asset pricing and financial economics

(Asked by: username_0 on 2017-07-08)

I am going to complete a continuous time finance course in the upcoming semester. Although all my higher education is in economics I have not encountered a financial economics setting of contingent markets,i.e, of the geometric representation of the state space of the aforementioned. I have a solid knowledge on investments, financial markets and financial products such as derivatives but I was looking for the mathematical finance formulation of contingent markets. What introductory book would be good for an introduction in the simpler settings before jumping to the Black-Scholes setting for example which is the end-goal of the class I am going to take. Cochrane's book "Asset Pricing" is similar to what I am looking for but I would like to know if there are any alternatives.

**Tags:** reference-request, financial-economics, asset-pricing

> **Comments:**
> **username_1**: With these types of questions, we usually like to limit the answers to one book per answer. See here: https://economics.stackexchange.com/questions/471/graduate-level-textbook-on-labor-economics-and-macro-labor  
> **username_1**: This question might be a duplicate. See here: https://economics.stackexchange.com/questions/11205/financial-economics-textbooks?rq=1 . It seems, however, that this question is more focused on asset pricing than on financial economics in general.  

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## 3 answers

### Answer by username_1 on 2017-08-11. Score: 2 | Accepted answer

[Dynamic Asset Pricing Theory](http://a.co/eMCTSvj), by Darrell Duffie.

This book seems to be referred to a lot. It's very thorough. In my experience, it might be a little to difficult for a introduction to the topic. However, it is a good reference.


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### Answer by username_1 on 2017-08-11. Score: 2

[Financial Asset Pricing Theory](http://a.co/ev5Ywe4), by Claus Munk.

This book takes a nice approach in that each chapter repeats the material 3 times: in discrete time with a discrete state space, in discrete time with a continuous state space, and in continuous time with a continuous state space. This makes it easy to see how each relates to the others. Also, it helps the reader to focus on the underlying concepts rather than the mathematical artifacts of each individual setting.

I like Cochrane's book a lot for the intuitions that it provides. In my opinion, Munk's book is very useful as a complement to Cochrane's book. Munk's book provides a lot of the mathematical clarity that I feel is less clear in Cochrane's book.


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### Answer by username_2 on 2017-07-11. Score: 2

If you are looking for something simpler before jumping to Black-Scholes, consider the textbook "[Investments](http://www.mheducation.com/highered/product/investments-bodie-kane/0077861671.html)" from Bodie, Kane, and Marcus.

You can look at the [table of contents](http://www.mheducation.com/highered/product/investments-bodie-kane/0077861671.toc.html). The book assumes that the reader does not know stochastic calculus and continuous time finance, but it still gets to the Black-Scholes formula.

> **Comments:**
> **username_0**: Ty for your answer. I've covered that book quite thoroughly and have a pretty good knowledge on derivative products from the book "Options, Futures, and Other Derivatives" from Hull. What I was looking for was a book with the geometric state-space representation of contigent markets that leads to the derivation of concepts such has complete markets, 1st and 2nd fundamental theorems of finance, etc  

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