Registry

Module Specifications

Current Academic Year 2012 - 2013
Please note that this information is subject to change.

Module Title	Mathematics of Finance:An Introduction
Module Code	MS216
School	School of Mathematics
Online Module Resources
Module Co-ordinator	Semester 1: John Carroll Semester 2: John Carroll Autumn: John Carroll
Module Teacher	John Carroll
NFQ level	8	Credit Rating	5
Pre-requisite	None
Co-requisite	None
Compatibles	None
Incompatibles	None

Description

MS216 aims to provide students with a grounding in elements of financial mathematics and its related applications, particularly the calculation of present and accumulated values for various streams of cash flows. Applications will include the use of a variety of annuity functions in loan calculations and investment project appraisal problems.

Learning Outcomes

1. Show how interest rates or discount rates may be expressed in terms of different time periods.
2. Calculate the present value and the accumulated value of a stream of equal or unequal payments using specified rates of interest, and the net present value at a real rate of interest, assuming a constant rate of inflation.
3. Define and use the more important compound interest functions including annuities certain.
4. Define an equation of value.
5. Describe how a loan may be repaid by regular instalments of interest and capital.
6. Apply discounted cashflow techniques to solve investment project appraisal problems.

Workload	Full-time hours per semester
*Type*	*Hours*	*Description*
Lecture	24	Lecture material on course content.
Tutorial	11	Tackle 4 tutorial sheets over the Semester.
Total Workload: 35

All module information is indicative and subject to change. For further information,students are advised to refer to the University's Marks and Standards and Programme Specific Regulations at: http://www.dcu.ie/registry/examinations/index.shtml

Indicative Content and Learning Activities

Interest Rates.
Nominal and effective rates of interest and discount; constant force of interest; simple equations of value; yield.CT1: (i) to (iii).

Basic Compound Interest Functions.
Level, deferred and increasing annuities; present and future values; equations of value and yield.CT1: (v) to (vii).

Loans & Annuities Payable pthly.
Loan schedules; annuities payable phtly; present values and accumulations; APR. CT1: (vi) & (viii).

Discounted Cash Flow.
Net cash flows; comparison of investment projects; net present values; yields; discounted payback period; real and money interest rates. CT1: (iv) & (ix).

Assessment Breakdown
Continuous Assessment	20%	Examination Weight	80%

Course Work Breakdown
Type	Description	% of total	Assessment Date
Multiple choice questions	55-minute In-Class Test	10%	Week 5
Multiple choice questions	55-minute In-Class Test.	10%	Week 10

Reassessment Requirement
Resit arrangements are explained by the following categories; 1 = A resit is available for all components of the module 2 = No resit is available for 100% continuous assessment module 3 = No resit is available for the continuous assessment component
This module is category 1

Indicative Reading List

ActEd Study Materials: 0, Subject CT1 Course Notes, Actuarial Education Company,
JJ McCutcheon and W E Scott: 1999, An Introduction to the Mathematics of Finance, Butterworth-Heinemann, 0 7506 0092

Other Resources

4731, Webpage, John Carroll, 0, MS216 Lecture Notes & Slides, DCU, www.dcu.ie/~carrollj/ms216.html, 4732, Webpage, John Carroll, 0, Tutorial Sheets & Past Papers (with answers), www.dcu.ie/~carrollj/ms216.html,

Array

Programme or List of Programmes

ACM

BSc Actuarial Mathematics

BA in Accounting & Finance

BSSA

Study Abroad (DCU Business School)

BSSAO

Study Abroad (DCU Business School)

CAFM

Common Entry into Mathematical Sciences

ECSA