This module introduces the fundamentals of mathematical modelling in finance, and the mathematics of financial annuities and investments. We explore the use of deterministic models that can be used to model and value known cashflows. We also explore stochastic, discrete-time models of investment risk and return.
Topics:
Data and financial modelling
Theory of interest rates
Equations of Value
Theories of financial market behaviour
Introduction to interest rate models
Modern portfolio theory
Asset valuation
Measures of investment risk
Learning Outcomes
By the end of the module students should be able to:
Describe, interpret, and discuss the theories on interest rates
Derive and define constant and time-varying compound interest functions and annuities
Define, interpret, and apply an Equation of Value
Describe, construct, interpret, and discuss the models underlying asset valuations
Assessment
40444-01 : Raw Module Mark : Coursework (100%)
Assessment Methods & Exceptions
Assessments: 3 hour Written Unseen January Examination (80%) In-course Assessment (20%)
Reassessment: 3 hour exam in supplementary exam period
