Intermediate Financial Theory, 3rd Edition

Intermediate Financial Theory, 3rd Edition,Jean-Pierre Danthine,John Donaldson,ISBN9780123865496
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Academic Press



235 X 191

Delivers a detailed explanation of financial economics to those who seek a pragmatic summary of modern finance without the demands of advanced mathematics

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GBP 45.74
GBP 60.99

Key Features

  • Completely updated edition of classic textbook that fills a gap between MBA- and PhD-level texts
  • Focuses on clear explanations of key concepts and requires limited mathematical prerequisites
  • Online solutions manual available
  • Updates include new structure emphasizing the distinction between the equilibrium and the arbitrage perspectives on valuation and pricing, and a new chapter on asset management for the long-term investor


Targeting readers with backgrounds in economics, Intermediate Financial Theory, Third Edition includes new material on the asset pricing implications of behavioral finance perspectives, recent developments in portfolio choice, derivatives-risk neutral pricing research, and implications of the 2008 financial crisis. Each chapter concludes with questions, and for the first time a freely accessible website presents complementary and supplementary material for every chapter. Known for its rigor and intuition, Intermediate Financial Theory is perfect for those who need basic training in financial theory and those looking for a user-friendly introduction to advanced theory.


Advanced undergraduates and graduate students worldwide working on financial economics and the theory of finance.

Jean-Pierre Danthine

Jean-Pierre Danthine is professor of economics and finance at the University of Lausanne Switzerland), director of the International Center for Financial Asset Management and Engineering Lausanne & Geneva) and CEPR Research Fellow. The holder of a Ph.D. in economics from Carnegie-Mellon University and a M.S. in Economics from the University of Louvain, Professor DanthineI previously taught at at Columbia University and held visiting appointments at CUNY Graduate Center, University of Southern California (Los Angeles), Université d'Aix-Marseille, Université Laval (Québec), as well as Universities of Toulon and Dijon. He is an Associate Editor of Macroeconomic Dynamics and Finance Research Letters; Chairman of the Scientific Council of the TCIP (Training Center for Investment Professionals); member of the Council of the European Economic Association, of the Scientific Councils of CEPREMAP (Paris), CREST (Paris), CREI (U. Pompeu Fabra, Barcelona) as well as the Fonds national de la recherche scientifique (Economics Commission - Belgium). He was also a member of the Executive Committee of the ICMB (Geneva). He was formerly Vice-Rector of the University of Lausanne, chairman of its Departement d'Econométrie et d'Economie Politique (DEEP) and director of its Institute for Banking and Financial Management, member of the Executive Committee of CEPR (Center for Economic Policy research - London), of the CEPS Macroeconomic Policy Group (Brussels), of the Scientific Council of the European Science Foundation Network in Financial Markets. He was also an Associate Editor of the European Economic Review, of the Journal of Empirical Finance and of the Revue Finance. His publications have appeared in Econometrica, the Journal of Political Economy, the Review of Economic Studies, the Journal of Finance, the Journal of Economic Theory, the Journal of Public Economics, the European Economic Review, and many other journals.

Affiliations and Expertise

Vice-Chairman of the Governing Board at the Swiss National Bank in Bern, Switzerland

John Donaldson

Affiliations and Expertise

Mario J. Gabelli Professor of Finance at Columbia University Business School, New York, NY, USA

Intermediate Financial Theory, 3rd Edition

Chapter 1: "Role of Financial Markets"

Chapter 2: "Challenges of Asset Pricing"


Chapter 3: "Choices in Risky Situations"

Chapter 4: "Measuring Risk and Risk Aversion"

Chapter 5: "Risk Aversion and Investment Decisions, Part 1"

Chapter 6: "Risk Aversion and Investment Decisions, Part 2"

Chapter 7: "Risk version and Investment Decisions, Part 3"


Chapter 8: "The CAPM"

Chapter 9: "Arrow-Debreu Pricing, Part I"

Chapter 10: "The Consumption Capital Asset Pricing Model (CCAPM)"

Chapter 11: "Arrow Debreu Pricing, Part II"


Chapter 12: "The Martingale Measure in Discrete Time, Part 1"

Chapter 13: "The Martingale Measure in Discrete Time, Part 2"

Chapter 14: "The APT"

Chapter 15: "Continuous Time Finance"

Chapter 16: "Portfolio Management in the Long Run"

Chapter 17: "Financial Structure and Firm Valuation in Incomplete Markets"


Chapter 18: "Financial Equilibrium with Differential Information"

Quotes and reviews

"This is an excellent book that introduces financial asset pricing theory as a natural extension of microeconomic and general equilibrium theory. The exposition of classic and recent results is clear, thorough and accessible to any economist or graduate student who has a good grounding in microeconomic theory. Having mastered this material the reader is well equipped to tackle the many variations of asset pricing models in the literature."
--Frank Milne, Queen’s University, Professor of Economics and Finance

"This book is ideally suited to students wishing to gain a deeper understanding of the basic concepts of financial economics beyond those presented in a typical MBA program without having to deal with unnecessary mathematical details. The exposition is superb and enriching of intuition. The book, written by two of the professions leading experts, is unique."
-- Rajnish Mehra, Professor of Finance, University of California, Santa Barbara
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