The new features in the eighth edition include:1. There is a new chapter (Chapter 8) devoted to securitization and the credit crisis. The events in financial markets since the seventh edition was published make these topics particularly relevant.)2. There is more discussion (Chapter 33) of the way commodity prices are modeled and commodity derivatives valued. (Energy derivatives and other commodity derivatives have become progressively more important in recent years.)3. The chapter on hedging using futures (Chapter 3) has been simplified and an appendix explaining the capital asset pricing model has been included. (This was suggested by a number of instructors.)4. Material on central clearing, liquidity risk and overnight indexed swaps has been included. (Following the credit crisis these are features of derivatives markets that everyone needs to understand.)5. An appendix to Chapter 12 shows that the Black-Scholes-Merton formula can be derived as the limiting case of a binomial tree. (This is one way of understanding the Black-Scholes-Merton result without stochastic calculus.)6. The material on value at risk is developed using an example involving real data taken from the credit crisis. Spreadsheets for the example are on my web site. (This change makes the material more interesting for readers and allows richer assignment questions to be used by instructors.)7. New material has been added on topics such as principal-protected notes, gap options, cliquet options, and jump processes, reflecting their importance in derivatives markets.8. Material has been added on applications of the Vasicek and CIR models. (This is particularly important for actuarial students and fund managers.)9. There are a number of enhancements to the DerivaGem software. Version 2.01, which is included with the 8th edition, is easier to install and use. It covers credit derivatives, which have become an increasingly important in derivatives markets in recent years. A version of DerivaGem is provided that can be used with Open Office by Mac and Linux users. In response to many requests from users, the code is provided for the DerivaGem functions. The software is now easier to install and a "Getting Started" section is included at the end of the book.10. The Test Bank available to adopting instructors has been improved.11. New end-of-chapter problems have been added.12. Several hundred PowerPoint slides (which can be downloaded from this website) have been updated and improved.