Syllabus
1. Simple interest and discount, calendar conventions.
2. Discount securities (bills of exchange, T-bills, checking account).
3. Compound interest and discount, continuous and random compounding. Inflation, real interest rate.
4. Time value of money. Systems of cash flows. Investment rules.
5. Annuities, perpetuities and deferred annuities.
6. Amortization of debt.
7. Bonds (types of bonds, bond pricing, yield curve, duration).
8. Stocks (stock pricing, stock analysis, rights issue).
9. Derivative securities (forwards, futures, swaps, options).
10. Speculation on securities, security exchanges, stock indices.
11. Financial risk. Portfolio analysis. Diversification. CAPM model.
12. Insurance classification.
13. Life Tables, commutation functions.
14. Basic calculation in life insurance.
15. Basic calculation in non-life insurance.
16. Pension insurance.
Annotation
Required course for bachelor's program in Financial mathematics. Survey of modern methods of financial and insurance calculations applied in financial and insurance practice.