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Financial Mathematics

Unit code: MAN623
Contact hours: 4 per week
Credit points: 12
Information about fees and unit costs

This unit includes the following: quantitative techniques in business, economics and finance; theory and structure of interest rates; general accumulation and discounting functions; force of interest; discounting including Modern Portfolio theory and extension; varying interest; general annuities; varying annuities; continuous varying annuities; mathematical analysis of financial transactions in money and capital markets; life annuities and life assurances; the life table; basic life table functions; life annuities and assurances; policy values; paid up policy values; changes to policies; use of life table; superannuation.

Availability
Semester Available
2013 Semester 2 Yes

Sample subject outline - Semester 2 2013

Note: Subject outlines often change before the semester begins. Below is a sample outline.

Rationale

Finance and economics are both areas in which quantitative analysis may play a major role. It is therefore important that an applied mathematician be skilled in this area.

Aims

This postgraduate unit aims to introduce you to methods additional to those studied in MAB313 or MAN313 and to provide relevant solutions to problems in the financial and business areas. This will include studying a number of mathematical models in the investment and finance areas.

Objectives

On successful completion of this postgraduate unit you should be able to:

1. Show an understanding of - modern portfolio theory (including its development and application), - continuous cash flows and the force of interest, - the issues associated with the management of a securities portfolio, and - contingent payments.
2. Apply calculus techniques to solve economics and financial problems.
3. Engage thinking and problem solving skills.
4. Develop information literacy.

Content

  • Mathematical models and quantitative techniques in economics and finance including portfolio models and analysis.

  • Theory and structure of interest rates - general accumulation and discounting functions, force of interest, discounting, varying interest, general annuities, varying annuities, continuous varying annuities.

  • Valuation of securities.

  • Life annuities and life assurances - the life table, basic life table functions, life annuities and assurances, policy values.

    • Approaches to Teaching and Learning

    The 52 hours of total contact time will involve a mixture of formal teaching and workshops. Theoretical developments are included and application of the techniques and models discussed. You will be encouraged to read the financial press and to relate contemporary developments to the theory.

    Note that this unit is being taught concurrently with an undergraduate offering of the same subject. University policy permits that postgraduate and undergraduate students attend the same lectures. Separate workshop/discussion groups will be provided for postgraduate students where numbers allow. As a postgraduate student you will be required to complete separate or additional assessment.

    Assessment

    The assessment items in this unit are designed to determine your level of competency, measured against criteria, in meeting the unit outcomes while providing you with a range of tasks with varying levels of skill development and difficulty.Formative feedback will be provided for the in-semester assessment items by way of written comments on the assessment items where appropriate, student perusal of the marked assessment piece and informal interview as required.

    Summative feedback will be provided throughout the semester with progressive posting of results via Blackboard.

    Assessment name: Presentation
    Description: This component may include a workbook and/or a report.
    Relates to objectives: All
    Weight: 30%
    Internal or external: Internal
    Group or individual: Group with Individual Component
    Due date: Progressive

    Assessment name: Project (Applied)
    Description: This component will assess your understanding of several major sections of the
    Relates to objectives: 1, 2 and 3.
    Weight: 25%
    Internal or external: Internal
    Group or individual: Group with Individual Component
    Due date: Progressive

    Assessment name: Examination (Theory)
    Description: This item will assess you on your knowledge and ability regarding the lecture content.
    Relates to objectives: All
    Weight: 45%
    Internal or external: Internal
    Group or individual: Individual
    Due date: End of Semester

    Academic Honesty

    QUT is committed to maintaining high academic standards to protect the value of its qualifications. To assist you in assuring the academic integrity of your assessment you are encouraged to make use of the support materials and services available to help you consider and check your assessment items. Important information about the university's approach to academic integrity of assessment is on your unit Blackboard site.

    A breach of academic integrity is regarded as Student Misconduct and can lead to the imposition of penalties.

    Resource materials

    There are no set texts for this unit. References and hand out materials will be provided in lectures.

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    Risk assessment statement

    There are no out of the ordinary risks associated with this unit.

    Disclaimer - Offer of some units is subject to viability, and information in these Unit Outlines is subject to change prior to commencement of semester.

    Last modified: 10-May-2012