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Books we love (in no particular order, amended as I use or refer to them)

David Harper CFA FRM

David Harper CFA FRM
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  • Options, Futures, and Other Derivatives by John Hull (10th Edition; but 9th or even 8th will suffice). Of course we love this classic, but with a caveat. This book is the essential introduction to derivatives, it has few peers (McDonald's Derivatives is the most notable). In the FRM Part 1, this is the single most important book; it represents the majority of the Financial Markets and Products topic (P1.T3). The caveat is that, once again, the latest edition is overall a very minor upgrade. On the fundamentals, this edition is highly similar to even the 8th edition; for example, the EOC practice questions appear to be largely the same. We note this only because the book is expensive, my 10th edition cost me $182.00, I sort of expected more new material. It's an AWESOME book, don't get me wrong, but unless you specifically know why you need the update, you probably don't need the the very latest version. (Nicole specifically requested a list of the new and/or updated EOC questions from them, because I really don't see them. Hull kindly replied but said they don't have such a list.)
Math/statistics (or other)
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Data science (caveat: I work with R https://www.r-project.org/ which tends to use hashtag #rstats. I have not had the time to practice python)
  • R for Excel Users: https://leanpub.com/r-for-excelusers/ (leanpub.com) or here on Amazon here it earns an almost-perfect 4.8/5.0 stars. Why do I love it? Because of the gentle introduction, this is overall very basic. A lot of us in finance have mad Excel skills but are intimidated by real programming (code). This is a great place to start!
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I'd recommend three textbooks for the math/statistics section:
  1. Calculus by Larson, Hostetler, and Edwards. I used this book for three semesters in college and it is an appropriate blend of application and rigor.
  2. Mathematical Statistics with Applications by Wackerly. This was the assigned textbook in a mathematical statistics class in college, and it is a great, rigorous introduction to calculus based statistics. My only issue with it is that is relatively light on econometrics related material, and a FRM candidate/practitioner would be better served by a dedicated econometrics textbook for these topics. Also, the book does tend to assume that the reader has had exposure to an introductory course in proofs/set theory, so there's that.
  3. Undergraduate Econometrics by Hill, Griffith, and Judge. This is just a wonderful introduction to econometrics in a (relatively) painless manner. Since it is a text geared towards undergraduate Economics students, it does not cover more complicated models (i.e. GARCH, ARCH, ARIMA) in nearly as much detail as the GARP material and it does not address issues more common in financial data sets.
As for more generalized finance texts, I highly recommend any edition of the graduate level version of Investments by Bodie/Kane/Marcus , and Damodaran on Valuation is a wonderful reference to have on hand.


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Option Volatility and Pricing by Sheldon Natenberg. It may not be as technical as Hull, but it is a must read for all options market makers.