This module provides a foundation to the mathematics of interest rates so that you will gain proficiency in the critical areas of designing and pricing investment products.
You will gain a comprehensive understanding of the key principles underlying interest rates and how to use these to price and value investments such as loans, shares, bonds and property.
You will also receive a practical introduction to financial modelling, giving you valuable hands-on experience in using models to solve complex financial problems. You will learn to apply the principles underlying interest rates on real data sets using relevant spreadsheet software (e.g. Microsoft Excel) to strengthen your understanding of the theory and gain valuable workplace proficiency.
This module together with module MACT7340 Actuarial Mathematics can lead to exemption from the CM1 exam of the Institute and Faculty of Actuaries (IFoA).
56 (Lecture 32, PC Workshop 24)
Take home test worth 30%
Online test using VLE worth 70%
Reassessment: Like-for-like - Including composite form of reassessment for failed written components – Online test using VLE.
On successfully completing the module, students will be able to:
1) Describe, analyse and discuss the theories on interest rates and the relationships between different measures of interest
2) Critically appraise and deploy established approaches in financial mathematics to value cashflows accurately using an advanced level of skill in calculation
3) Use sound judgement to select and use appropriate methods and models to derive key results in financial mathematics
4) Solve complex problems in financial mathematics accurately using an advanced level of skill in calculation and manipulation of models
5) Use critical awareness to develop models to solve complex 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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