Features of the significantly enlarged and revised second edition:

• Offers insight into new methods and the applicability of the stochastic technology
• Provides the tools, instruments and (online) algorithms for recent techniques in quantitative finance and modern treatments in insurance calculations
• Covers topics such as
  - expected shortfall for heavy tailed and mixture distributions*
  - pricing of variance swaps*
  - volatility smile calibration in FX markets
  - pricing of catastrophe bonds and temperature derivatives*
  - building loss models and ruin probability approximation
  - insurance pricing with GLM*
  - equity linked retirement plans*(new topics in the second edition marked with*)
• Presents extensive examples