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Mathematics of Finance I (ACTL90001)
Graduate courseworkPoints: 12.5On Campus (Parkville)
Overview
Availability | Semester 1 |
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Fees | Look up fees |
Topics include data analysis, the principles of actuarial modelling, the description of financial transactions; the understanding of real and nominal interest rates, the time value of money, the present value and accumulated value for a given cashflow, the term structure of interest rates; the duration, convexity and immunisation of cashflows; the equation of value and its usage to solve various practical problems, project appraisals.
Intended learning outcomes
Intended learning outcomes
- 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 cashflow 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.
- Show an understanding of duration, convexity and immunization of cashflows.
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: 8 November 2024