Copula methods in Finance : Summary

The book begins by giving a very quick overview of derivatives pricing, stochastic vol models, risk neutral pricing and ends the first chapter by giving couple of motivating examples where loosely coupled joined distributions given marginals , are used to price options . Chapter 2: Bivariate Copulas Copula is a type of function . But a very special function which maps marginals to joint. Hence one needs to be aware about the nature of the function and also its limitations.