ECTS - Introduction to Mathematical Finance
Introduction to Mathematical Finance (MATH313) Course Detail
| Course Name | Course Code | Season | Lecture Hours | Application Hours | Lab Hours | Credit | ECTS |
|---|---|---|---|---|---|---|---|
| Introduction to Mathematical Finance | MATH313 | Elective Courses | 3 | 0 | 0 | 3 | 6 |
| Pre-requisite Course(s) |
|---|
| N/A |
| Course Language | English |
|---|---|
| Course Type | Elective Courses |
| Course Level | Bachelor’s Degree (First Cycle) |
| Mode of Delivery | Face To Face |
| Learning and Teaching Strategies | Lecture, Question and Answer, Problem Solving. |
| Course Lecturer(s) |
|
| Course Objectives | The main aim of this course is to provide students with a solid grounding in compound interest theory and experience of its application to the analysis of complex financial transactions. The compound interest model is developed in detail, and is applied to mortgage and commercial loans, to consumer credit transactions, to the valuation of securities, and to the measurement of investment performance. The term structure of interest rates is also covered. Uncertainty about future interest rates is modeled by assuming that future interest rates are random variables. |
| Course Learning Outcomes |
The students who succeeded in this course;
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| Course Content | Introduction to theory of interest: simple and compound interest, time value of money, rate of interest, rate of discount, nominal rates, effective rates, compound interest functions, generalized cash flow modelling, loans, present value analysis, accumulated profit, and internal rate of return for investment projects, annuities, perpetuities, meas |
Weekly Subjects and Releated Preparation Studies
| Week | Subjects | Preparation |
|---|---|---|
| 1 | Introduction to theory of interest: Simple and compound interest | Book1-pp. 1-7 |
| 2 | Time value of money, Nominal rates, effective rates, rate of discount | 1.Kitap -s. 10-13 |
| 3 | Force of interest | Book 1-pp. 14-17 |
| 4 | Cash flows and Present value analysis | Book 1-pp. 18-25 |
| 5 | The equation of value, yields, annuities | Book 1-pp. 36-54 |
| 6 | Loan Schedules | Book 1-pp. 55-61 |
| 7 | Annuities payable pthly | Book 1-pp. 66-72 |
| 8 | Net present values and yields | Book 1-pp. 86-93 |
| 9 | The comparison investment projects , bonds | Book 1-pp. 107-114 Other Source: 223-236 |
| 10 | Probability | Book 2-pp. 1-31 |
| 11 | Geometric Brownian motion | Book 2-pp. 32-37 |
| 12 | Stochastic interest rates | Book 1-pp. 269-286 |
| 13 | Arbitrage and forward contracts | Book 2-pp.63-70 |
| 14 | The term structure of interest rates | Other source: 301-320 |
| 15 | Problem solving and review | |
| 16 | Final Exam |
Sources
| Course Book | 1. An Introduction to Mathematics of Finance, J. J. McCutcheon and W. Scott, 1986. |
|---|---|
| 2. An elementary introduction to mathematical finance, Options and other topics, Sheldon M. Ross, Cambridge University Press, 2003. | |
| Other Sources | 3. Mathematics of Investment and Credit, Samuel A. Broverman, ACTEX, 2010. |
Evaluation System
| Requirements | Number | Percentage of Grade |
|---|---|---|
| Attendance/Participation | - | - |
| Laboratory | - | - |
| Application | - | - |
| Field Work | - | - |
| Special Course Internship | - | - |
| Quizzes/Studio Critics | - | - |
| Homework Assignments | 3 | 7 |
| Presentation | - | - |
| Project | - | - |
| Report | - | - |
| Seminar | - | - |
| Midterms Exams/Midterms Jury | 2 | 50 |
| Final Exam/Final Jury | 1 | 35 |
| Toplam | 6 | 92 |
| Percentage of Semester Work | 65 |
|---|---|
| Percentage of Final Work | 35 |
| Total | 100 |
Course Category
| Core Courses | |
|---|---|
| Major Area Courses | X |
| Supportive Courses | |
| Media and Managment Skills Courses | |
| Transferable Skill Courses |
The Relation Between Course Learning Competencies and Program Qualifications
| # | Program Qualifications / Competencies | Level of Contribution | ||||
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | ||
| 1 | Acquires skills to use the advanced theoretical and applied knowledge obtained at the mathematics bachelors program to do further academic and scientific research in both mathematics-based graduate programs and public or private sectors. | X | ||||
| 2 | Transplants and applies the theoretical and applicable knowledge gained in their field to the secondary education by using suitable tools and devices. | X | ||||
| 3 | Acquires the skill of choosing, using and improving problem solving techniques which are needed for modeling and solving current problems in mathematics or related fields by using the obtained knowledge and skills. | X | ||||
| 4 | Acquires analytical thinking and uses time effectively in the process of deduction | X | ||||
| 5 | Acquires basic software knowledge necessary to work in the computer science related fields and together with the skills to use information technologies effectively. | X | ||||
| 6 | Obtains the ability to collect data, to analyze, interpret and use statistical methods necessary in decision making processes. | X | ||||
| 7 | Acquires the level of knowledge to be able to work in the mathematics and related fields and keeps professional knowledge and skills up-to-date with awareness in the importance of lifelong learning. | X | ||||
| 8 | Takes responsibility in mathematics related areas and has the ability to work affectively either individually or as a member of a team. | X | ||||
| 9 | Has proficiency in English language and has the ability to communicate with colleagues and to follow the innovations in mathematics and related fields. | X | ||||
| 10 | Has the ability to communicate ideas with peers supported by qualitative and quantitative data. | X | ||||
| 11 | Has professional and ethical consciousness and responsibility which takes into account the universal and social dimensions in the process of data collection, interpretation, implementation and declaration of results in mathematics and its applications. | X | ||||
ECTS/Workload Table
| Activities | Number | Duration (Hours) | Total Workload |
|---|---|---|---|
| Course Hours (Including Exam Week: 16 x Total Hours) | 16 | 3 | 48 |
| Laboratory | |||
| Application | |||
| Special Course Internship | |||
| Field Work | |||
| Study Hours Out of Class | 14 | 3 | 42 |
| Presentation/Seminar Prepration | |||
| Project | |||
| Report | |||
| Homework Assignments | 5 | 6 | 30 |
| Quizzes/Studio Critics | |||
| Prepration of Midterm Exams/Midterm Jury | 2 | 10 | 20 |
| Prepration of Final Exams/Final Jury | 1 | 10 | 10 |
| Total Workload | 150 | ||