Course: Financial Mathematics

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Course title Financial Mathematics
Course code KMA/FIMN
Organizational form of instruction Lecture + Exercise
Level of course Master
Year of study not specified
Semester Summer
Number of ECTS credits 3
Language of instruction Czech
Status of course Compulsory-optional
Form of instruction Face-to-face
Work placements This is not an internship
Recommended optional programme components None
Lecturer(s)
  • Bohanesová Eva, Mgr. Ph.D.
Course content
1. Basic concepts, simple interest. 2. Simple interest applications (current account, overdraft, credit card, bridging credit). 3. Simple discount and its application (trade draft, executed note, bill of exchange). 4. Compounding. 5. Discounting (discounting performed m-times a year); rate of inflation, interest taxation. 6. Systems of cash flows. Annuities and perpetuities, deferred annuities. 7. Debt redemption (annuity repayment, repayment with constant depreciation, calculation of a balance without schedule for repayment, annual percentage rate of costs). 8. Investment evaluation methods (NPV, IRR, repayment time). 9. Bonds (price, bond yields, duration and its application to a portfolio imunization). 10. Stocks (pricing models, stock yields, first option). 11. Exchange rates, financial derivatives - forwards. 12. Financial derivatives - futures, swaps, options; basics of portfolio theory.

Learning activities and teaching methods
Lecture, Demonstration, Projection (static, dynamic)
  • Homework for Teaching - 10 hours per semester
  • Preparation for the Course Credit - 14 hours per semester
  • Preparation for the Exam - 36 hours per semester
  • Attendace - 39 hours per semester
Learning outcomes
To know principles and techniques of basic financial calculations
Comprehension, application To be able to use theoretical methods in solving practical problems of saving, investments, credits, securities, exchange rate, event. other bank products
Prerequisites
Knowledge of the simple interest and compounding and of the basic kinds of securities - advantage.

Assessment methods and criteria
Oral exam, Student performance

Credit: the student has to pass the written test.
Recommended literature
  • E. Bohanesová. (2006). Finanční matematika I. Olomouc, PřF UP.
  • E. Bohanesová. (2013). Finanční matematika. Olomouc.
  • H. U. Gerber. (1995). Life Insurance Mathematics. Springer.
  • R. Ptáček, P. Borkovec, P. Toman. (2004). Finanční trhy - cvičení. Skriptum. Mendelova zemědělská a lesnická fakulta, Brno.
  • Radová, Dvořák. Finanční matematika pro každého. Grada.
  • T. Cipra. (1998). Praktický průvodce finanční a pojistnou matematikou. HZ, Praha.
  • T. Tepper, M. Kápl. (1994). Peníze a vy. Prospektrum Praha.


Study plans that include the course
Faculty Study plan (Version) Branch of study Category Recommended year of study Recommended semester