Programme/Approved Electives for 2021/22
Available as a Free Standing Elective
MAT 20023 Probability,MAT 20008 Differential Equations
Financial Mathematics' growing importance is shown by the 2008 financial crisis. It controls various aspects of our daily life. Over the years, the demands of the knowledge in financial mathematics have helped many graduates to gain positions in financial institutions successfully.This module aims to give a mathematical perspective on the valuation of financial instruments (futures, options, etc.) and their risk-management. By the end of this module, students will have confidence solving various problems in stock modelling and derivatives pricing.
The principal aim of this module is to give students an introduction to the mathematical concepts used in financial mathematics. The majority of the module will be concerned with stochastic models for stocks and pricing financial derivative products.
Intended Learning Outcomes
apply the main principles of financial markets to real-world scenarios: 1,2analyze and explain the use of financial derivatives and hedging strategies: 1,2create no-arbitrage arguments to derive upper and lower bounds of financial contracts and exploit arbitrage opportunities: 1,2create hedging arguments for the discrete one-step binomial model and the continuous Black-Scholes model: 1,2evaluate the outcomes of mathematical analysis to draw conclusions regarding financial markets: 1,2
30 hours lectures18 hours assignment preparation100 hours independent study2 hours exam
1: Assignment weighted 20%
Description of Module Assessment
take home assessmentThere will be one assignment during the semester. It will consist of a set of questions that students will answer based on content delivered.2: Unseen Exam weighted 80%
Final exam- 2 hoursThe examination paper will consist of no less than five and not more than eight questions all of which are compulsory.