Financial Mathematics I

This subject has the following teaching availabilities in 2012:

One of:

• a mark of 60 or better in 620-120 UMEP Mathematics for High Achieving Students or 620-121 Mathematics A (Advanced) (for students who took these subjects in 2007 or earlier);

• an average mark of 60 or better in MAST10008 Accelerated Mathematics 1 and MAST10009 Accelerated Mathematics 2, with a pass in each subject;

• a mark of 75 or better in 620-141 Mathematics A;

• an average mark of 75 or better in MAST10006 Calculus 2 and MAST10007 Linear Algebra;

• a total of 135 or better in MAST10007 Linear Algebra and MAST10009 Accelerated Mathematics 2, with a pass in each subject;

• an average mark of 60 or better in 620-120 UMEP Mathematics for High Achieving Students and MAST10009 Accelerated Mathematics 2, with a pass in each subject

None

Please refer to Prerequisites and Corequisites.

None

For the purposes of considering requests for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Students Experiencing Academic Disadvantage Policy, academic requirements for this subject are articulated in the Subject Description, Subject Objectives, Generic Skills and Assessment Requirements for this entry.

The University is dedicated to provide support to those with special requirements. Further details on the disability support scheme can be found at the Disability Liaison Unit website: http://www.services.unimelb.edu.au/disability/

Topics include compound interest functions; valuation of a series of payments, including where the cash flows and/or the force of interest are continuous functions of time; equations of value; loans repayable by instalments; characteristics of major asset types; and discount valuation of fixed interest securities, ordinary shares and property, including effects of tax.

• Apply relevant pre-requisite mathematical knowledge in the solution of a range of practical problems;
• Describe and apply the main methods of finding the accumulation or present value of money under simple and compound interest and discount;
• Derive and apply formulae to calculate the accumulation or present value of a series of payments, including the cases of continuous payments and variable interest rates
• Analyse and solve equations of value for rates of interest
• Calculate rates of return on investment portfolios using methods employed by actuaries
• Construct and analyse a loan schedule, including cases when terms of a loan are altered;
• Explain the key features of the main types of financial assets, including shares, bonds, property and derivatives
• Perform compound interest calculations relating to financial assets, including the calculation of price and yield

A 2-hour end-of-semester examination (70%), two assignments totalling not more than 2000 words (20%), and a 45 minute mid-semester examination (10%). Satisfactory completion of this subject requires a 50% pass in the end of semester examination

You will be advised of prescribed texts by your lecturer.

Information Not Available

This subject potentially can be taken as a breadth subject component for the following courses:

• Bachelor of Arts
• Bachelor of Environments
• Bachelor of Music

You should visit learn more about breadth subjects and read the breadth requirements for your degree, and should discuss your choice with your student adviser, before deciding on your subjects.

• High level of development: written communication; problem solving; application of theory to practice; synthesis of data and other information; use of computer software.