3 credits
Spring 2026 Lecture Distance Learning Upper Division
A mathematical treatment of some fundamental concepts of financial mathematics and their application to real world business situations and basic risk management. Includes discussions of valuing investments, capital budgeting, valuing contingent cash flows, yield curves, spot rates, forward rates, short sales, Macaulay duration, modified duration, convexity, and immunization. Provides preparation for the SOA/CAS Actuarial Exam FM/2.
Learning Outcomes1Define and recognize concepts related to the time value of money, and will be able to do calculations involving these concepts.
2Define and recognize concepts related to annuities and cash flows, and will be able to do calculations involving these concepts.
3Define and recognize concepts related to loans, and will be able to do calculations involving these concepts.
4Define and recognize concepts related to bonds, and will be able to do calculations involving these concepts.
5Define and recognize concepts related to general cash flows and portfolios, and will be able to do calculations involving these concepts.
6Dfine and recognize concepts related to immunization, and will be able to do calculations involving these concepts.
7Define and recognize concepts related to interest rate swaps, and will be able to do calculations involving these concepts.
Prerequisites
made by Purdue students.