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ACSC12-201: Financial Mathematics

Description

This subject provides a foundation in the mathematics that underpins financial calculations. The theory of financial mathematics is supplemented with applications of that theory to real world problems. These practical applications include valuing a series of cashflows (annuities), valuing bonds with tax implications, calculating loan repayment schedules, valuing forward contracts, modelling investment returns, selecting investment projects and estimating the sensitivity of a series of cashflows to interest rate changes.

Subject details

TypeUndergraduate
CodeACSC12-201
EFTSL0.125
FacultyBond Business School
Semesters offered
  • January 2018 [Standard Offering]
Credit10
Study abroadAvailable to Study Abroad students
Study areas
  • Actuarial Science
Subject fees
  • Commencing in 2017: $4,205
  • Commencing in 2018: $4,247

Learning outcomes

1. Describe the time value of money concept and apply it in different situations; understand the difference between real and money interest rates.
2. Define and analyse basic compound interest problems.
3. Calculate present and future values for a wide variety of cash flow streams, using effective and nominal interest rates.
4. Calculate a schedule of loan repayments and identify capital and interest components.
5. Use discounted cash flow techniques to perform project appraisal and capital budgeting.
6. Understand the investment and risk characteristics of a variety of investment assets
7. Demonstrate an understanding of the term structure of interest rates
8. Calculate the delivery price and the arbitrage-free value of a forward contract. Understand and apply probability rules and concepts relating to discrete and continuous random variables
9. Demonstrate an understanding of simple stochastic models for investment returns

Prerequisites

STAT11-112 - Quantitative Methods

Subject dates

Standard
Enrolment opens13/11/2016
Semester start16/01/2017
Subject start16/01/2017
Cancellation 1?30/01/2017
Cancellation 2?06/02/2017
Last enrolment29/01/2017
Last withdrawal?10/02/2017
Teaching census?10/02/2017
Standard Offering
Enrolment opens12/11/2017
Semester start15/01/2018
Subject start15/01/2018
Cancellation 1?29/01/2018
Cancellation 2?05/02/2018
Last enrolment28/01/2018
Last withdrawal?09/02/2018
Teaching census?09/02/2018