Math 2620: Financial Mathematics I, Fall 2016 Welcome to Math 2620! This is an important foundation course in actuarial science and finance, with two primary goals for students. The first, and most important, goal is to master the fundamental concepts of financial mathematics, as listed in the following section, \"Learning Objectives.\" The second goal (for students majoring in Actuarial Science) is to begin preparation for SOA Exam FM (CAS Exam 2). However, this is not an exam preparation course; it covers many, but not all, of the topics for Exam FM/2. Math 3615 is the preparation course for Exam FM/2. In addition, this course provides students an introduction to the mathematical principles underlying personal financial management. Learning Objectives: Knowledge of Key Terms Simple interest, compound interest, and discount Nominal and effective rates of interest and discount Force of interest Equivalent interest measures Equation of value Present value, future value, and current value Annuities and perpetuities Yield rates Arithmetic and geometric average rates of return Spot rates and forward rates Duration, convexity, and immunization Yield curves and the term structure of interest rates Bonds, mortgages, stocks, and other financial instruments Understanding of Key Procedures Calculate equivalent interest rates Calculate the value of an annuity or a perpetuity Calculate a present value or accumulated value (given a set of cash flows, the method of crediting interest, and the applicable interest rate(s)) Calculate (using calculator functions) the yield rate for a given set of cash flows Calculate a loan payment amount and the corresponding loan amortization schedule Calculate the price, duration, and convexity of a bond Calculate the duration and convexity of a series of cash flows Calculate a spot rate curve, given a yield curve Calculate forward rates, given a spot rate curve Syllabus - Fall 2016 Textbook: Financial Mathematics: A Practical Guide for Actuaries and other Business Professionals (Second Edition), 2005, by Chris Ruckman, & Joe Francis Calculator: A Texas Instruments BA II Plus calculator or other Society of Actuaries' approved calculator is required for this course. Although other financial calculators are able to perform all or most of the same functions as the BA II Plus, the specific procedures for the BA II Plus will be the basis of the calculator solutions and methods discussed in class and in the handouts. Only the BA II Plus or other approved calculator will be permitted for use on quizzes, tests, and the final exam for this course. PLEASE BRING YOUR CALCULATOR TO EVERY CLASS. Instructor: Office: Office hours: E-mail: Jiatian (Justin) Xu, ACAA, PhD in Mathematics with Thesis in Actuarial Science Monteith 114 Tu. 1:50pm - 3:20 pm, Th. 2pm - 3:30pm or by appointment jiatian.xu@uconn.edu Grading Plan: Grades will be determined roughly as follows: 7 Homework Assignments (100 points each) 15% 5 In-class quizzes (20 points each) 15% Late assignments will not be accepted. 2 Mid-term tests (100 points each) 40% 1 Final Exam (100 points) 30%