Catalog Description: Accumulation functions, yield rates, annuities, loan repayment, term structure of interest rates/spot rates/forward rates, options, duration/convexity. This course follows the syllabus for Financial Mathematics (FM) Exam of the Society of Actuaries and prepares students to pass the FM Exam.
Prerequisite: AMS 310
Co-prerequisite: AMS 261 or MAT 203 or 205
3 credits
Textbook: Mathematical Interest Theory, 7th Edition by J. Daniel and L. Vaaler, Pearson
ISBN# 9780131472853
Actuarial Exam: The material in this course is the basis of the second actuarial exam, Exam FM, of the Society of Actuaries . For more details about actuarial preparation at Stony Brook see Actuarial Program
THIS COURSE IS ALSO OFFERED DURING THE SUMMER SESSION. SEE THE SUMMER SESSION SCHEDULE.
1. Accumulation functions (simple, compounded, general) - 5 hours
2. Yield rates, Approximate yield rates - 4 hours
3. Annuities (simple, geometric, arithmetic) 5 - hours
4. Loan repayment - 5 hours
5. Bonds - 3 hours
6. Term structure of interest rates / Spot rates / Forward rates - 3 hours
7. Options (Call, Put, Put-Call parity) - 4 hours
8. Duration/Convexity - 3 hours
9. Problems from the Financial Mathematics portion of the actuary exams - 5 hours
10. Examinations and Review - 5 hours