The book "Martingale Methods in Financial Modelling" (Second Edition) is a comprehensive resource on financial modelling and pricing of derivatives, edited by B. Rozovskiǐ and G. Grimmett. The second edition incorporates significant advancements in the field over the seven years since the first edition, focusing on practical aspects rather than theoretical ones. Key topics include arbitrage pricing theory, interest rate models, and volatility risk. The book is divided into three parts: Spot and Futures Markets, Fixed-income Markets, and an Appendix covering Itô stochastic calculus. The authors, Marek Musiela and Marek Rutkowski, aim to provide a practical guide for both mathematicians and finance professionals, emphasizing the importance of real-world applications and market imperfections. The book includes detailed analyses of various models, such as the Black-Scholes model, dividend-paying stocks, and foreign market derivatives, along with advanced topics like stochastic volatility and alternative interest rate models.The book "Martingale Methods in Financial Modelling" (Second Edition) is a comprehensive resource on financial modelling and pricing of derivatives, edited by B. Rozovskiǐ and G. Grimmett. The second edition incorporates significant advancements in the field over the seven years since the first edition, focusing on practical aspects rather than theoretical ones. Key topics include arbitrage pricing theory, interest rate models, and volatility risk. The book is divided into three parts: Spot and Futures Markets, Fixed-income Markets, and an Appendix covering Itô stochastic calculus. The authors, Marek Musiela and Marek Rutkowski, aim to provide a practical guide for both mathematicians and finance professionals, emphasizing the importance of real-world applications and market imperfections. The book includes detailed analyses of various models, such as the Black-Scholes model, dividend-paying stocks, and foreign market derivatives, along with advanced topics like stochastic volatility and alternative interest rate models.