Course co-ordinator(s): Dr Alistair Wallis (Edinburgh), Dr Karamjeet Singh (Malaysia), Dr Andres Barajas Paz (Dubai).
Aims:
To introduce the student to simple mathematical models of cashflows accumulated or discounted at interest, and to develop skill in applying these models to real financial contracts and transactions
Summary:
- Simple interest
- Compound interest and discount
- Time units and effective rates of interest
- Accumulations and present values of discrete-time cashflows
- Varying rates of interest
- Annuities
- Yields
- Measuring rates of return
- Loan schedules
- Fixed-interest securities
- Discounted Cash Flows
Detailed Information
Course Description: Link to Official Course Descriptor.
Pre-requisites: none.
Linked course(s): F78AB Actuarial and Financial Mathematics .
Location: Edinburgh, Malaysia.
Semester: 1.
Syllabus:
- Simple interest
- Compound interest and discount
- Time units and effective rates of interest
- Accumulations and present values of discrete-time cashflows
- Varying rates of interest
- Annuities
- Yields
- Measuring rates of return
- Loan schedules
- Fixed-interest securities
- Discounted Cash Flows
- Stochastic interest rate models
- Inflation indexing and index-linked bond
Reading list:
- Garrett, S.J. (2013). An Introduction to the Mathematics of Finance (second edition). Butterworth-Heinemann.
- Zima, P. & Brown, R.L. (1996). Schaum’s Outline: Mathematics of Finance (Second Edition), McGraw Hill.
SCQF Level: 8.
Credits: 15.
Other Information
Help: If you have any problems or questions regarding the course, you are encouraged to contact the course leader.
Canvas: further information and course materials are available on Canvas