教學大綱 Syllabus

The goal of the Financial Mathematics course is to provide undergraduate an understanding of the fundamental concepts of financial mathematics, and how those concepts are applied in calculating present and accumulated values for various streams of cash flows as a basis for future use in: reserving, valuation, pricing, asset/liability management, investment income, capital budgeting and valuing contingent cash flows. After finishing this course, students should understand the follows.

1. Gain a through understanding of the mathematics of compound interest.
2. Gain a through understanding of the terminology and notation used in compound interest theory.
3. Get practice in performing calculations related to the theory of interest.
4. Know how to value and accumulate continuously-payable cash flows and how to calculate internal rates of return for transactions with such cash flows.
5. Understand how an appropriate inflation index may be used to measure changes in the value of money with the passage of time.
6. Understand the basic ideas underlying a stochastic interest rate model.
7. Understand the concept of amortization schedules and sinking funds
8. Understand the basic ideas of bonds and other securities
9. Gain a through understanding of practical applications of interest theory

10. Gain a through understanding of financial derivatives and their use in risk management.

11. Gain a through understanding of the concept of no-arbitrage as a fundamental concept in financial mathematics.