In this article we discuss fundamentals of the debt securities pricing. We begin with a generalization of the present value concept. Though the present value is the base valuation method in the modern finance we will illustrate that this concept does not sufficiently accurate in producing...

In the last three decades increased attention has been paid to the valuation of the contingent claims whose value depend on underlying financial instruments, called securities. One of the most significant achievements in modern investment sciences is the Black-Scholes option pricing model. This...

In this article we discuss the fundamentals of pricing of the popular financial instruments. The basic point of our approach is to extend the present value benchmark concept. The present value valuation approach plays the similar role as The Newton Laws in the Classic Mechanics. Thus our primary...

The credit risk along with the credit derivatives is a modern area of the financial business. In recent years this field becomes the most successful innovation, which accumulates significant cash flows as well as the highest attention within financial community. In this notice we present some...

In this paper we present a critical viewpoint on interpretation of one of the most important innovation in the recent world economy. This is derivatives' market, the options segment in particular. The standard options such as plain vanilla, nonstandard exotics or hybrid options and more recent...

We explain that the options price definition given by Black and Scholes contradicts our experience. Then the risk neutral interpretation of the solution of the Black Scholes equation is a mathematical mistake

This paper deals with the option-pricing problem. In the first part of the paper we study in more details the discrete setting of the option-pricing problem usually referred to as the binomial scheme. We highlight basic differences between the old and the new approaches. The main qualitative...