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I have heard good things about Epps but haven't read it. Hull is aimed at less technical people and can get a bit turgid. I have my list of recommended books with discussion at http://www.markjoshi.com/RecommendedBooks.html


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Let's think about it like this: $V(E,T) = \int_E^{\infty} (x-E)^{+} \rho (x) dx$ Then $\frac{\partial C}{\partial E} = \int^\infty_E \rho(x) dx$ and $\frac{\partial^2 C}{\partial K^2} = \rho(K)$ Ill leave you to interpret these quantities. Hint, what is the defintion of the value of a contingent claim?



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