Unit Code: FIN602

Unit Name: Actuarial Finance

Description: This unit will provide students with grounding in elements of actuarial and financial mathematics and its related applications, particularly the calculation of present and accumulated values for various streams of cash flows. In this course student will be able to learn and describe how to use a generalized cash-flow model to describe financial transactions and take into account the time value of money using the concepts of compound interest and discounting. Show how interest rates or discount rates may be expressed in terms of different time periods and understanding the real and money interest rates. Student will be able to describe how a loan may be repaid by regular installments of interest and capital. Also, describe the investment and risk characteristics of the various types of asset available for investment purposes. Finally, student will be able to show an understanding of the term structure of interest rates and an understanding of simple stochastic interest models for investment returns. This unit emphasizes an intuitive treatment of the mathematics of finance and insurance, with special attention to applications.

Learning Target Outcomes:

Prerequisite: FIN501

Prerequisite Sentence: or consent from HOD.

Credit Point: 15

Offered In: Semester 2