Introductory Financial Mathematics (ACTL20001)

Undergraduate level 2Points: 12.5On Campus (Parkville)

You’re viewing the 2025 Handbook:
Or view archived Handbooks

Overview

Availability
Semester 1
FeesLook up fees

This subject aims to provide students with basic training on modern financial mathematics methods, which covers an overview of data analysis, principles of actuarial modelling and financial transactions, the understanding of real and nominal interest rates, the time value of money methods, bond pricing methods, assets replication methods, the equation of value methods, and project appraisals methods. This subject focuses on applying the above methods to the mathematical modelling of financial markets.

Intended learning outcomes

On successful completion of this subject, students should be able to:

  • Describe sources of data, the aims and conducting of data analysis, and the principles of actuarial modelling in the solution of a range of practical problems;
  • Describe and apply the main methods of finding the accumulation or present value of a payment, or a series of payments under simple and compound interest and discount;
  • Analyse and solve equations of value for the price or yield of a bond, the present value or yield of an ordinary share or property;
  • Construct and analyse a loan schedule, including cases when terms of a loan are altered;
  • Explain the key features of the main types of financial assets, including shares, bonds, property and derivatives
  • Show how discounted cash-flow and equation of value techniques can be used in investment project appraisal;
  • Demonstrate a knowledge and understanding of real and money interest rates, and the term structures.
  • Demonstrate an understanding of duration, convexity and immunisation of cash-flows.

Generic skills

  • High level of development: written communication; problem solving; application of theory to practice; synthesis of data and other information; use of computer software.

Last updated: 20 March 2025

Eligibility and requirements

Prerequisites

Students must meet one of the following prerequisite options:

  • A total of 150 (out of 200) or more across MAST10006 or MAST10021 and MAST10007 or MAST10022;
  • A pass in both MAST10008 and MAST10009;
  • A total of 125 (out of 200) or more across MAST10007 or MAST10022 and MAST10009 with a pass in each subject;
  • A total of 125 (out of 200) or more across MAST10008 and MAST10006 or MAST10021 with a pass in each subject;
  • A pass in MAST10019 Calculus Extension Studies plus a total of 125 (out of 200) or more across both MAST10018 Linear Algebra Extension Studies and MAST20026 a pass in each subject;
  • A pass in MAST10019 Calculus Extension Studies plus a total of 125 (out of 200) or more across MAST10007 or MAST10022 and MAST20026 with a pass in each subject;
  • A total of 125 (out of 200) or more across both MAST10018 Linear Algebra Extension Studies and MAST10009 with a pass in each subject;
  • A total of 150 (out of 200) or more across both MAST10018 Linear Algebra Extension Studies and MAST10019 Calculus Extension Studies;
  • A total of 150 (out of 200) or more across both MAST10018 Linear Algebra Extension Studies and MAST10006 or MAST10021;
  • A pass in both MAST10013 UMEP Mathematics for High Achieving Students and MAST10009.

Code Name Teaching period Credit Points
MAST10006 Calculus 2
Summer Term (On Campus - Parkville)
Semester 2 (On Campus - Parkville)
Semester 1 (On Campus - Parkville)
 12.5
MAST10007 Linear Algebra
Semester 2 (On Campus - Parkville)
Semester 1 (On Campus - Parkville)
Summer Term (On Campus - Parkville)
 12.5
MAST10008 Accelerated Mathematics 1
Semester 1 (On Campus - Parkville)
 12.5
MAST10009 Accelerated Mathematics 2
Semester 2 (On Campus - Parkville)
 12.5
MAST10021 Calculus 2: Advanced
Semester 2 (On Campus - Parkville)
 12.5
MAST10022 Linear Algebra: Advanced
Semester 1 (On Campus - Parkville)
 12.5
MAST20026 Real Analysis
Semester 2 (On Campus - Parkville)
Semester 1 (On Campus - Parkville)
 12.5

Corequisites

None

Non-allowed subjects

None

Recommended background knowledge

Please refer to Prerequisites and Corequisites.

Inherent requirements (core participation requirements)

The University of Melbourne is committed to providing students with reasonable adjustments to assessment and participation under the Disability Standards for Education (2005), and the Assessment and Results Policy (MPF1326). Students are expected to meet the core participation requirements for their course. These can be viewed under Entry and Participation Requirements for the course outlines in the Handbook.

Further details on how to seek academic adjustments can be found on the Student Equity and Disability Support website: http://services.unimelb.edu.au/student-equity/home

Last updated: 20 March 2025

Assessment

DescriptionTimingPercentage

Assignment 1

  • 1000 words
First half of the teaching period15%

Assignment 2

  • 1000 words
Second half of the teaching period15%

End-of-semester examination

  • 2 hours
Hurdle requirement: To pass this subject, students must pass the end-of-semester exam		During the examination period70%

Last updated: 20 March 2025

Dates & times

  • Semester 1
    Principal coordinatorPing Chen
    Mode of deliveryOn Campus (Parkville)
    Contact hoursTwo 1-hour lectures and a 1-hour tutorial per week
    Total time commitment170 hours
    Teaching period 3 March 2025 to 1 June 2025
    Last self-enrol date14 March 2025
    Census date31 March 2025
    Last date to withdraw without fail 9 May 2025
    Assessment period ends27 June 2025

    Semester 1 contact information

    pche@unimelb.edu.au

Time commitment details

Estimated total time commitment of 170 hours.

What do these dates mean

Visit this webpage to find out about these key dates, including how they impact on:

  • Your tuition fees, academic transcript and statements.
  • And for Commonwealth Supported students, your:
       -  Student Learning Entitlement. This applies to all students enrolled in a Commonwealth Supported Place (CSP).
     

    Subjects withdrawn after the census date (including up to the ‘last day to withdraw without fail’) count toward the Student Learning Entitlement.

Last updated: 20 March 2025

Further information

Last updated: 20 March 2025