## Financial Mathematics

• Recapitulation of basic mathematical terms (functions, exponential and logarithmic functions) • Interest and return types (arithmetic, geometric with single and multiple interest payments, continuous) • Interest and return calculations for all types mentioned above • Equivalent transformations of interest rates and returns • Final and cash value calculations with the various interest types • Annuity calculations • Annuity value • Present value of an infinity stream of constant cash flows and of an infinity stream of cash flows with constant growth rate • Consideration of inflation in future and present values • Drawing up repayment schedules on an annual and an interim basis • Bond pricing incl. accrued interest • Calculation of the Macaulay Duration • Calculation of the premium for a life insurance policy

face to face

compulsory

### Recommended or required reading and other learning resources/tools

Jürgen Tietze: Einführung in die Finanzmathematik, Springer Verlag, 12th edition, 2014 Thomas Heidorn: Finanzmathematik in der Bankpraxis: Vom Zins zur Option, 7th Edition, 2016 Exercise sheets

### Planned learning activities and teaching methods

Integrated classes (2 groups) Lectures and exercises

### Assessment methods and criteria

Continuous assessment (three short written tests) and final written exam

### Prerequisites and co-requisites

(Austrian) secondary school-leaving level in mathematics

### Infos

#### Degree programme

Banking and Finance (Bachelor)

Bachelor

3.00

German

Full-Time

2022

1 WS

No

#### Learning outcome

After successful completion of the course, the students can • identify and explain the standard types of interest (decursive/anticipatory or deferred/prepayment) • match daily counting conventions with different European and global markets and to explain their calculation differences • identify and apply various methods of calculating returns (International Capital Markets Association, US method, 360TM) • calculate future values, net present values and annuities of payment series such as loans and bonds • create and use basic risk ratios

#### Course code

0229-19-01-VZ-DE-03