SEMINAR    Friday, 15th December 2006 - h. 15:00 Auditorium B. Touschek    L. Passalacqua (Rome - U. La Sapienza) Introduction to financial modelling Abstract The fundamental concepts at the basis of modern financial theory will be presented. It will be shown how stochastic models and no-arbitrage principle are used in the perfect market hypothesis to address typical problems such as asset pricing, asset allocation, asset-liability management, risk management, etc. Computational issues and numerical techniques will be discussed for some seminal problems, including the pricing of the American put option, a free boundary problem where traditional MonteCarlo techniques were thought to be ineffective. Finally, the role of fair valuation in international regulation will be briefly addressed.