Financial innovation is a common occurrence in the global financial system, leading to increased economic efficiency. To create new financial products, financial engineers need knowledge of optimization and financial modeling techniques. Key studies by various authors have contributed to the understanding of financial innovation. This book provides an in-depth look at financial innovation and its regulation, focusing on creating innovative financial securities and derivative pricing. It also debunks myths about performance evaluation models. The book is divided into six chapters covering important theories, technology in financial modeling, the relationship between financial innovation and the economy, its role in the global financial system, and a comparison between India and the United States.