In my opinion, the following 3 books are particularly worthwhile for students who are interested in learning more about finance and risk management:
- Against the Gods: The Remarkable Story of Risk, by Peter L. Bernstein.
- A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, by Burton G. Malkiel.
- Stocks for the Long Run : The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies, by Jeremy J. Siegel.
Philosophically, these books present what I would consider to be an “orthodox” perspective; i.e., they fit well with the so-called rational choice, efficient markets view of the world which is prevalent in most departments of finance and economics. For some “heterodox” alternatives, I like (but am nevertheless highly critical of) both of Nicholas Taleb’s books:
- Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (read this first).
- The Black Swan: The Impact of the Highly Improbable (the sequel to “Fooled by Randomness”).
Finally, I would be remiss to not also include two other favorites which are not books on finance or economics; rather they deal with the history and philosophy of applied mathematics. These books include:
- Innumeracy: Mathematical Illiteracy and Its Consequences, by John Allen Paulos.
- A Brief History of Infinity, by Brian Clegg.