APPLIED MATHEMATICS (TURKISH, THESIS)
Master TR-NQF-HE: Level 7 QF-EHEA: Second Cycle EQF-LLL: Level 7

Course Introduction and Application Information

Course Code Course Name Semester Theoretical Practical Credit ECTS
MAT5025 Mathematical Finance Fall
Spring
3 0 3 8
This catalog is for information purposes. Course status is determined by the relevant department at the beginning of semester.

Basic information

Language of instruction: Turkish
Type of course: Departmental Elective
Course Level:
Mode of Delivery: Face to face
Course Coordinator : Dr. GENCO FAS
Recommended Optional Program Components: None
Course Objectives: The purpose of this course is to give the student a background in the theory of interest, provide an understanding of cashflows and the ability to compare investment decisions. The course material is designed to meet the requirements of national and international exams of actuarial science.

Learning Outcomes

The students who have succeeded in this course;
Students will learn how to apply compound interest theory to find the present value and accumulated value of cashflows, will know about types of annuities certain and will be able to evaluate yield rates and compare investment decisions. This course will also demonstrate how loan repayments can be determined and will treat some special products.

Course Content

Time value of money, simple and compound interest, accumulated value and present value, solution of interest problems, basic and general annuities, yield rates, amortisation tables and loan funds, discounted cashflow, capital redemption policies.

Weekly Detailed Course Contents

Week Subject Related Preparation
1) Measurment of Interest, accumulation and amount functions, effective rate of interest, simple and compound interest, present value, effective rate of discount, nominal rates of interest and discount.
2) Measurment of interest continued; forces of ineterest and discount, solution of problems in interest, equations of value, unknown time, unknown interest.
3) Elementary annuities:annuity immediate, annuity due, annuity values on any date, perpetuities, unknown time, varying interest.
4) General annuities : Annuities payable less frequently than interest is convertible, continuous annuities, unknown time and unknown rate of interest.
5) General Annuities continued: Elementary varying annuities, more general varying annuities, continuous varying annuities.
6) Yield rates: Discounted cash flow, single investment rate, Reinvestmnt rate, investment yields,
7) Yield rates continued: time weighted yields of interest, portfolio methods and investment year method.
8) Tekrar ve problem çözümleri.
9) Amortization schedules and sinking funds: Finding outstanding fund, amortization schedules, sinking funds..
10) Discounted cash flow analysis cont’d: effect of inflation, yield of a fund, measuring investmnt performance.
11) Capital Redemption Policies: Premium Calculation, policy value, p-term payment policies.
12) Capital redemption policies continued: surrender values, paid up policy values and policy alterations,changes in interest rate, reinvestment rate.
13) Discounted cash flow analysis: Net cash flow, net present value and profit, comparison of two investment projects, differing interest in lending and borrowing
14) General review.

Sources

Course Notes / Textbooks: The Theory of Interest, Kellison S.G., Irwin Inc., U.S.A., 1991.


An Introduction to Mathematics of Finance, Cutcheon, J.J. and Scott, W.F., , Butterworth-Heinemann, Oxford, 1996.
References: SOA sınav soruları/SOA exam questions.
http://www.soa.org/education/exam-req/syllabus-study-materials/edu-multiple-choice-exam.aspx

Evaluation System

Semester Requirements Number of Activities Level of Contribution
Attendance 14 % 5
Homework Assignments 3 % 15
Project 1 % 15
Midterms 1 % 30
Final 1 % 35
Total % 100
PERCENTAGE OF SEMESTER WORK % 50
PERCENTAGE OF FINAL WORK % 50
Total % 100

ECTS / Workload Table

Activities Number of Activities Duration (Hours) Workload
Course Hours 14 3 42
Study Hours Out of Class 14 3 42
Project 1 15 15
Homework Assignments 4 10 40
Quizzes 3 6 18
Midterms 1 19 19
Final 1 24 24
Total Workload 200

Contribution of Learning Outcomes to Programme Outcomes

No Effect 1 Lowest 2 Low 3 Average 4 High 5 Highest
           
Program Outcomes Level of Contribution
1) Ability to assimilate mathematic related concepts and associate these concepts with each other. 3
2) Ability to gain qualifications based on basic mathematical skills, problem solving, reasoning, association and generalization. 2
3) Be able to organize events, for the development of critical and creative thinking and problem solving skills, by using appropriate methods and techniques.
4) Ability to make individual and team work on issues related to working and social life. 3
5) Ability to transfer ideas and suggestions, related to topics about his/her field of interest, written and verball.
6) Ability to use mathematical knowledge in technology. 3
7) To apply mathematical principles to real world problems.
8) Ability to use the approaches and knowledge of other disciplines in Mathematics. 3
9) Be able to set up and develope a solution method for a problem in mathematics independently, be able to solve and evaluate the results and to apply them if necessary. 2
10) To be able to link abstract thought that one has to concrete events and to transfer the solutions and examine and interpret the results scientifically by forming experiments and collecting data. 3
11) To be able to conduct a research either as an individual or as a team member, and to be effective in each related step of the project, to take role in the decision process, to plan and manage the project by using time effectively.
12) To be able to acquire necessary information and to make modeling in any field that mathematics is used and to improve herself/himself,