MAT4061 Mathematics for Finance and ManagementBahçeşehir UniversityDegree Programs MATHEMATICSGeneral Information For StudentsDiploma SupplementErasmus Policy StatementNational QualificationsBologna Commission
MATHEMATICS
Bachelor TR-NQF-HE: Level 6 QF-EHEA: First Cycle EQF-LLL: Level 6

Course Introduction and Application Information

Course Code Course Name Semester Theoretical Practical Credit ECTS
MAT4061 Mathematics for Finance and Management Spring 3 0 3 6
This catalog is for information purposes. Course status is determined by the relevant department at the beginning of semester.

Basic information

Language of instruction: English
Type of course: Departmental Elective
Course Level: Bachelor’s Degree (First Cycle)
Mode of Delivery: Face to face
Course Coordinator :
Recommended Optional Program Components: None
Course Objectives: The objective is to provide an understanding of the fundamental concepts of financial mathematics and see how these relate to financial modelling. The course aims at introducing concepts like reserving, valuation, pricing, duration calculation, asset/liability management, investment income, capital budgeting and valuing contingent cash flows as well as giving the student some competence in comparing investment alternatives and an undrstanding of utility theory.

Learning Outcomes

The students who have succeeded in this course;
The student will be able to calculate the time value of money, the present and accumulated values of annuities, will know about different types of annuities and lending and amortizations schedules. The student will also be able to evaluate investment alternatives and calculate breakeven points and carry sensitivity anlayses.

Course Content

Time value of money, types of interest, calculation of cashflows, annuities certain, deferred annuities, borrowing and lending models, yield rates, amortization schedules, calculation of internal and external rate of returns, comparison of investment alternatives, breakeven and sensitivity analyses.

Weekly Detailed Course Contents

Week Subject Related Preparation
1) Time value of money, interest, cashflows.
2) Nominal and effective rates of interest and discount.
3) Calculation of present and future values of cashflows.
4) Annuities certain, present value, accumulated value. Deferred annuities. Loan schedules.
5) More general annuities. Continuous annuities, increasing annuities
5) Yield rates. Discounted cash flow analysis. Borrowing and lending models.
7) Pay back models.
8) Amortization and sinking fund models.
9) Applications of money-time relationships.
10) Calculation of present and future and annual worths under different return assumptions.
11) Internal and external rates of return and applications.
12) Comparing Investment Alternatives
13) Breakeven and Sensitivity Analysis
14) Utility Theory

Sources

Course Notes / Textbooks: The Theory of Interest, Stephen G. Kellison, Irwin Series
References: An Introduction to the Mathematics of Finance, J.J. Mc Cutcheon, W.F. Scott, Butterworth, Heinmann.

Engineering Economy, 13th Edition, William G. Sullivan, Elin M. Wicks, James T.

Evaluation System

Semester Requirements Number of Activities Level of Contribution
Attendance 14 % 10
Quizzes 2 % 10
Midterms 2 % 40
Final 1 % 40
Total % 100
PERCENTAGE OF SEMESTER WORK % 60
PERCENTAGE OF FINAL WORK % 40
Total % 100

ECTS / Workload Table

Activities Number of Activities Duration (Hours) Workload
Course Hours 14 3 42
Study Hours Out of Class 14 2 28
Quizzes 2 5 10
Midterms 2 5 10
Final 1 10 10
Total Workload 100

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) To have a grasp of basic mathematics, applied mathematics and theories and applications in Mathematics 5
2) To be able to understand and assess mathematical proofs and construct appropriate proofs of their own and also define and analyze problems and to find solutions based on scientific methods, 5
3) To be able to apply mathematics in real life with interdisciplinary approach and to discover their potentials, 4
4) To be able to acquire necessary information and to make modeling in any field that mathematics is used and to improve herself/himself, 4
5) To be able to tell theoretical and technical information easily to both experts in detail and non-experts in basic and comprehensible way, 4
6) To be familiar with computer programs used in the fields of mathematics and to be able to use at least one of them effectively at the European Computer Driving Licence Advanced Level, 4
7) To be able to behave in accordance with social, scientific and ethical values in each step of the projects involved and to be able to introduce and apply projects in terms of civic engagement, 5
8) To be able to evaluate all processes effectively and to have enough awareness about quality management by being conscious and having intellectual background in the universal sense, 4
9) By having a way of abstract thinking, to be able to connect concrete events and to transfer solutions, to be able to design experiments, collect data, and analyze results by scientific methods and to interfere, 4
10) To be able to continue lifelong learning by renewing the knowledge, the abilities and the competencies which have been developed during the program, and being conscious about lifelong learning, 4
11) To be able to adapt and transfer the knowledge gained in the areas of mathematics ; such as algebra, analysis, number theory, mathematical logic, geometry and topology to the level of secondary school, 4
12) 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. 4