Chapter 10: Quantitative Finance

This book is based on the precept that mineral resource engineering and financial engineering are equally important aspects of project development. The latter includes use of “real options” based on the Black–Scholes formula, and other project risks including interest rate uncertainty and credit risk. This chapter provides a whistle-stop tour of the mathematical methods of quantitative finance that address these problems. Much more detail can be found in the textbooks listed at the end of the chapter.