In this module you will learn about the mathematics behind the design and operation of popular financial investments. It will enable you to gain an understanding of the key principles of working with interest rates, and of how these can be used to price and value investments such as loans, shares, bonds and property. You will also receive a practical introduction to financial modelling and learn how models can be used to solve financial problems. This includes using the application of the above ideas on real data sets using e.g. Microsoft Excel.
This module together with second-year module MACT5340 Actuarial Mathematics 1 and the final year module MACT6340 Actuarial Mathematics 2 can lead to exemption from the CM1 exam of the Institute and Faculty of Actuaries (IFoA).
Lecture 28, PC Workshop 28, Tutorials 8, Independent Study 86, Assessment Preparation 50.
Spring
Single take-home test worth 30%.
Online test using VLE (2 hours approx) worth 70%.
Reassessment Method: Like-for-like Including composite form of reassessment for failed components –Online test using VLE.
On successfully completing the module, students will be able to:
1) Describe and discuss the theories on interest rates and the relationships between different measures of interest
2) Deploy established approaches in financial mathematics to value cashflows accurately using a basic level of skill in calculation
3) Select and use appropriate methods and models to derive key results in financial mathematics
4) Solve simple financial mathematics problems accurately using a basic level of skill in calculation and manipulation of models
5) Develop basic models to solve financial problems either by hand or via use of specific software and information technology and with an appreciation of the uncertainty involved.
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