FINANCIAL MATHEMATICS

The course tackles the subjects and problems of the classical Financial Mathematics and aims at providing theoretical notions and operational capacities that enable to solve the main financial problems in certainty conditions that arise in business and financial markets.

1.
Theoretical knowledge: by the end of the course, students will be able
to:
- acquire the basic vocabulary needed to allow students to engage
with theoretical and practical problems related to the valuation of
debts and financial investments,
- understand essential literature on debts and financial investments
instruments and their markets,
- define the fundamental features of debts and investments (loans,
mortgages, leasing, coupons and zero-coupon bonds),
- appreciate the importance of assessing risks and costs inherent
with financial investments and debts.

2. Theoretical, applied, and methodological skills and comptences: by
the end of the course, students will be able to:
- identify the relevant aspects of a problem or specific risk to
hedge,
- organize and integrate data and information needed to find a
solution,
- compare models and financial tools discussed during the course,
- solve evaluation problems..

3. Judgement and decision making skills: by the end of the course,
students are expected to be able to:
- choose the most convenient alternative,
- apply the method which is more aligned to the problem under study.

4. Communication skills:
- present in writing analyses and results of pratical and
theoretical problems and solution to exercises,
- use the students' forum (on moodle.unive.it) to discuss further
problems and exercises.

5. Learning capability: the student is expected to:
- study the book indicated in the references and possibly to read
the assigned chapters before classes,
- take notes,
- solve further exercises available online and at the end of the
book.

Mathematics/Mathematics is mandatory

1. Basics of interest rates
2. Interest rates in the presence of inflation or for a financial transaction in a foreign currency
3. Annuities
4. Amortization of a debt
5. Bonds
6. Criteria for the evaluation of fixed financial projects

A. BASSO, P. PIANCA, Introduzione alla Matematica Finanziaria (3rd ed.), Wolters Kluwer, 2017

M. CORAZZA, L'n-esimo eserciziario di Matematica Finanziaria, Giappichelli, 2017

Further readings and exercises are available on-line at moodle.unive.it

Written examination entails the solution of two exercises similar to those
solved in class, aiming at verifying the skills descrebd above. The
solution of the exercises will entail all the logic and theoretical
discussions which lead to the results. Students can apply for the exam
only if they solved the on line tests obtaining a minimum grade.

Standard with exercises on the arguments carried out

Italian

Further readings can be found on the e-learning platform Moodle.

written