Understanding financial engineering is more important than ever for market participants today. Starting with an introduction to financial mathematics, the course first explains fundamental symmetric products (fixed and variable interest rate bonds, forward rate agreements, and swaps). Then, using stock options as an example, various types of options, their valuation components, and options pricing models are presented. These form the foundation for the analysis of structured products with stock options (equity-linked bonds, discount certificates, index-linked bonds). Furthermore, interest rate options (bond options, caps, floors, collars, and swaptions) are discussed, and based on this, structured products (bonds with simple and multiple call options, reverse floaters, leveraged floaters, capped constant maturity swaps) are analyzed. The product range is completed with the analysis of convertible bonds and certificates (including guarantee, bonus, and leverage certificates). Valuation methods based on analytical formulas as well as binomial trees are employed. Additionally, Monte Carlo simulation is increasingly used for products with complex payout profiles. The reader is gradually introduced to the various valuation techniques. A new chapter on ethics in financial engineering has also been added. This book is now available in its seventh, revised, and expanded edition.