I don't know whether this question is in order here. I do a bit of teaching and I am preparing my own notes but I thought that his should not be necessary.

In which book/pdf on the web can we find a basic but rigorous treatment of the notions

  • return (log,geometric)
  • expected return (arithmetic/geometric)
  • volatility (annualizing, ...)
  • Sharpe ratio
  • maybe more (e.g. draw down)

both in the case of one asset and in the portfolio setting (where matrix algebra can be applied).

I would love to have this one paper from the net that containes this short intro. It would answer 10% of the questions posted here too.

If it is not on the web - let us write it ;)

  • 2
    $\begingroup$ I love this question already! ...and hope that we will get a lot of interesting answers! $\endgroup$ – vonjd May 2 '16 at 13:29

If I had to give only one title this would be it:

FT Guide to Understanding Finance by J. Estrada (Second Edition published 2011)

It explains all of the above concepts (and more) in a very accessible, yet mathematically correct manner.

A sample can be found: Here

The only thing is that it is not really short (the first part, i.e. up to p. 150, is relevant here) but you can be sure that your students will understand those topics thoroughly afterwards!

  • $\begingroup$ Thanks for this answer and pointing to the book. I wonder whether useful lecture notes about this topic - that students could download for free- lie around on the web somewhere too. $\endgroup$ – Ric May 2 '16 at 13:57
  • $\begingroup$ I have found "Finance in a nutshell - A no-nonsense companion to the tools and techniques in fianace" by the same author (Javier Estrada) in my collection. It is from 2005 but the basics should be the same. Estrada seems to be a good choice for the basics. $\endgroup$ – Ric May 3 '16 at 6:42
  • $\begingroup$ @Richard: Yes, I think this is the title of the first edition. $\endgroup$ – vonjd May 3 '16 at 9:59

Financial markets & Corporate Strategy - Grinblatt & Titman

The book is very intuitive, but as a consequence less comprehensive than ex. Options, Futures, and other Derivatives by Hull (which is seen as the basic foundation of everything quant in some parts of the industry.)

A great entry level book to finance, and is publically avaliable here: http://down.cenet.org.cn/upfile/10/2013410233155145.pdf


I am biased, but I am fond of the notes I wrote: a Short Sharpe Course.

  • $\begingroup$ Thank you! I like these notes as they are self contained and offer a lot of useful stuff besides SR! $\endgroup$ – Ric Jan 22 '18 at 7:55

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