This subject offers a foundation in compound interest theory which underpins a number of common financial calculations. This theoretical knowledge is supplemented with application to a variety of valuation and investment decisions. An introduction to simple stochastic models is also provided.
|Faculty||Bond Business School|
|Study abroad||Available to Study Abroad students|
1. Use discounted cash flow techniques to calculate home loan repayment schedule, perform project appraisal and determine capital budgeting requirements.
2. Explain the investment and risk characteristics of a variety of investment assets.
3. Demonstrate an understanding of the term structure of interest rates, the concept of spot rate, forward rate, duration of a series of cash flows, and immunisation.
4. Calculate the delivery price and the arbitrage-free value of a forward contract.
5. Apply probability rules and concepts relating to discrete and continuous random variables. Demonstrate an understanding of simple stochastic models for investment returns.
Please check the subject outline for pre-requisite subjects.