Actuarial Mathematics 1

Overview

(1) Intro to cashflow modules and using them to describe financial instruments.
(2) Time value of money, interest rates and force of interest: discounting single cashflows using simple and compound interest rates (compounded annually and more frequently).
(3) Discounting and accumulating a series of cashflows using actuarial annuity functions such as annuity certain (payable in advance, in arrears, continuously), plus increasing and deferred annuities.
(4) Equations of value and calculating loan schedules.
(5) Project appraisal using Net Present Value, Internal/Money-weighted/Linked-Internal rate of return etc.
(6) Introduction to asset classes and simple derivative functions.

Learning Objectives

At the conclusion of this module students will be equipped to:
1.Understand simple actuarial functions used and mathematical techniques employed, by an actuary.
2.Be able to convert annual interest rates into continuous rates and rates of other compound frequencies.
3.Determine the present value of cashflows and/or the yield for various financial instruments.

Skills

Numerical and problem solving skills.

Assessment

Students must achieve an overall mark of 40% in the module to pass