# Mathematics of Finance

10985

### Department

Departamento de Matemática

3.0

### Teacher in charge

Gracinda Rita Diogo Guerreiro

3

Português

### Objectives

Understand the principles of Financial Mathematics and apply them in a wide range of financial transactions or investment funding (investment savings in time deposits, housing loans or consumption etc..).

Apply specific methods relating to financial annuities, loan repayments, investment and financial evaluation of investments.

### Prerequisites

Students should have knowledge at the level of mathematical analysis (sequences in arithmetic progression and geometric sums, series, differentiation and integration) as well as on the use of Microsoft Excel.

### Subject matter

1 - Basics

2 - Capitalization Regimes

3 - Equity Capitals

4 - Financial Annuities

5 - Reimbursement of Loans

6 - Bond Loans

7 - Calculus and Financial Applications Capital

8 - Risk Measures of Interest Rate

### Bibliography

MATEUS, J.  (2000) Cálculo financeiro; Edições Sílabo,

MATIAS, R. (2007)  Cálculo financeiro : teoria e prática; Escolar Editora.

Jorion, Philippe (2006) Value at Risk, 3rd Ed.: The New Benchmark for Managing Financial Risk; McGraw-Hill

### Teaching method

The teaching method used in this course can be summarized as follows:

-In the first part, the topics are introduced through an oral presentation, whose main objective is to motivate student interest in the study of this subject, at the same time it draws attention to the important aspects of the subject under study. The oral presentation is made traditionally on the board under the support of "slides".

-In the second part, exercises are proposed and corrected. Questions that have resulted from the study of students are taken into account.

In a third-strand, continuous evaluation is performed with a mini-test of 45 minutes to perform during the semester.

-The fourth part are the computer classes, which aim to prepare students for the practice of the Financial Mathematics.

### Evaluation method

VALUATION RULES

Obtaining Frequency

Attendance at the course is given to students who attended, at least, half of the classes.

Evaluation

Obtaining Attendance is compulsory for the completion of the assessment tests .

The assessment of the course in Financial Calculus consists of three evaluation elements :

- two tests, T1 and T2 , lasting 90 minutes, held during the semester.

The absence on an assessment translates into a rating of 0 values ​​in this evaluation.

Approval in Regular Season

Considering T1, T2 the grades obtained in Tests 1 and 2 and NN the Rating of Regular Season, it is considered that a student obtains approval for the course if check all of the following conditions :

- Rank Test 2 : T2 > = 7.5 points .
- Regular Season Rating : NN = 0.5T1 + 0.5 T2 > = 9.5.

Approval Period of Appeal

You can do the exam Appeal if you have obtained the Attendance .

The rate of  the Exam Appeal, ER is the final rate of the student.