- Docente: Emanuela Maria Assunta Maresi
- Credits: 5
- SSD: SECS-S/06
- Language: Italian
- Teaching Mode: Traditional lectures
- Campus: Bologna
- Corso: First cycle degree programme (L) in STATISTICAL SCIENCES (cod. 8054)
Learning outcomes
It is hoped that this course will provide students of finance and business with a basic knowledge of the working of interest rates in a wide range of financial transactions, such as borrows and bonds.
Course contents
Introduction.
1. Caracteristcs and properties of money markets.
Elementary financial transactions: mathematical foundations of borrowingand lending.
Accumulated and discounted values.
Simple and compound interest; continuous compounding.
Nominal and effective rates of interest.
Equivalent interest rates.
2. Introduction to annuities.
Basic annuity functions: accumulated and discounted values.
Direct and inverse problems.
3. Applications to financial transactions.
Mortgages and borrows.
Amortization by an ordinary level annuity.
Amortization with constant payment on principal.
Amortization schedules.
Bonds: prices and yield rates.
Internal rate of return.
Readings/Bibliography
P. Zima, R. L. Brown - Mathematics of Finance, McGraw-Hill, 1984.
M. V. Butcher, C. J. Nesbitt - Mathematics of compound interest, Edwards Brothers Inc., Ann Arbour, Michigan, 1991.
Teaching methods
Classroom lessons.Theoretical financial problems will be best understood through the use of several examples.
A limited level of mathematical knowledge is assumed at the start of the course.
Assessment methods
Written or oral examination about theory and practical exercises.
Teaching tools
Blackboard,overhead projector and transparency films. .
Office hours
See the website of Emanuela Maria Assunta Maresi