Python for Finance

Python for Finance, originally titled Python for Finance, is written by finance professor Yuxing Yan, with the Chinese edition translated by Zhang Shaojun in collaboration with the author. The book has 12 chapters and is positioned as "a hands-on Python primer written by a finance professor": it teaches both programming and the reasoning behind financial models. The opening chapters start from zero: how to install Python, choose between versions, run programs via a GUI, command line, or DOS window, assign variables and perform basic math, use the math module, and work with data types such as tuples and lists. Chapter 3 applies the syntax to financial scenarios, guiding readers to hand-build a financial calculator that implements functions for present value, annuities, interest-rate conversion, continuous compounding, net present value, payback period, and internal rate of return, while learning to create custom modules, add comments, and debug. Chapter 4 uses a complete program to calculate a call option price, demonstrating engineering habits such as the "empty-shell method" and the "commenting method." The second half moves into core tools and models: Chapters 5 through 7 introduce modules, NumPy and SciPy (matrix operations, linear regression, CAPM, interpolation, random-number seeds, and more), and matplotlib plotting (cash-flow curves, diversification effects, candlestick charts, price-volume charts); Chapter 8 uses pandas and statsmodels for time series, pulling data from multiple sources such as Yahoo Finance, Excel, CSV, and web pages, calculating daily/monthly/annual returns, and performing t-tests, Fama-French three-factor regressions, Fama-MacBeth regressions, value at risk, and the efficient portfolio frontier; Chapters 9 through 12 cover Black-Scholes-Merton option pricing and the Greeks, the binomial method, iterative solving for implied volatility, Monte Carlo simulation and exotic options (average-price, barrier, lookback), and close with volatility, ARCH/GARCH, and GJR-GARCH models. Each chapter includes a summary and exercises, with dense code examples and accompanying datasets. The Chinese edition corresponds to the first English edition, and some data interfaces (such as Yahoo Finance) no longer work, so readers must substitute data sources when working through the code.