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01/24/2014

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University of Vermont Course Outline Spring 2014 Course:
 Math 183
Fundamentals of Financial Mathematics
 OL1 (14562)
Instructor:
 
Joe Kudrle (It’s an old Czech name pronounced
Cudderly 
.)
Office:
 
302 Lord House (16 Colchester Avenue is the address…It’s the Cream/Green
building across the street from the Center Theatre/Ira Allen Chapel.)
E-mail:
Phone:
 802-656-4294 (Office) and 802-399-8092 (Cell)
Prerequisites:
 Students must have completed Ma 20, Ma 22 or Ma 23. A background in Finance is nice but not required
…I do not have a formal b
ackground in Finance myself, and all of the relevant terminology is covered in the textbook.
Book:
 
Mathematics of Investment and Credit 
, 5th Edition by Broverman (Actex Publishing ISBN-10: 1566987679). You are welcome to obtain an earlier edition of the textbook. A solutions manual is also available, and I would recommend
a copy of this if you like to “tinker” with problems.
 
Technology Note:
 A majority of the work done for this course will be done via the UVM BlackBoard Computer System.
You should also have a method to scan and transfer completed work back to me. Scanning and saving the work as a PDF file is the most desirable method, but other options are available
see Grading section of syllabus.
 I will have
step-by-step instructions
 posted along the way to ensure that students do not feel overwhelmed by the technology. Furthermore, I understand that technology can be
 finicky 
 at times, so I plan to be very understanding if an issue arises causing an unforeseen problem. The purpose of the class is for each student to increase his or her level of knowledge, and again, I want to ensure that this is done as stress free an environment as possible.
UVM BlackBoard System:
 
Course Description
:
Fundamentals of Financial Mathematics
 is a course designed to introduce students to the basic concepts of financial mathematics. Topics covered will come from, but are not limited to, the following list:
Module I.
 
Time Value of Money 
 (Topics from Chapter 1)
o
 
Simple and compounds rates of interest and discount
o
 
Nominal and effective rates of interest and discount
o
 
Force of interest
o
 
Present Value/Future Value/Current Value
o
 
Accumulation Functions
Module II.
 
 Annuities and Perpetuities
(Topics from Chapter 2)
o
 
Annuity Due and Immediate
o
 
Increasing and Decreasing Payment Annuities
o
 
Terms of an Annuity
Module III.
 
Mortgages and Loans
(Topics from Chapter 3)
o
 
Principal, Interest, Term, Balance, etc.
o
 
Amortization
o
 
Sinking Funds
Module IV.
 
Bond Concepts
(Topics from Chapter 4)
o
 
Price, Redemption Value, Par Value/Face Value, Coupons, etc.
o
 
Term of a Bond
o
 
Yield Rate
o
 
Book value
o
 
Accumulation of Discount
Module V.
 
Cash Flows, Portfolios, and Other Topics
(Topics from Chapters 5
 –
 9)
o
 
Yield Rate/Rate of Return
o
 
Net Present Value
o
 
Duration and Volatility
Calculator/Computer
: Because of the heavy computations involved in the course, each student is expected to obtain appropriate calculator(s). If you are serious about sitting for the actuarial exam FM/2, I recommend that you obtain
two different calculators
. A
TI-30XII or
 
TI-30XIIS
 for simple mathematical computations
and
 a
TI-BAII Plus or TI-BAII Plus Professional
 for very specific financial computations. You should know that most candidates who sit for exam FM/2 bring at least two calculators (most common pair is
TI-30XIIS
 and
TI-BAII Plus Professional
)! Lastly, please note that you can get by using a
TI-83
, a
TI-84
 or a
TI-89
, as well. Also, some students have been comfortable using programs such as
Excel
,
MatLab
 or
Mathematica
to work out some of the more ornery computations. You can choose to use whatever makes you most comfortable.
 
Method of Instruction:
 Due to the class being fully on-line, much of the instruction duties fall on the student. However, I will go out of my way to ensure that you are keeping up with the materials. I will do the following:
 
Post Detailed Section Notes, including worked out problems.
 
Post Brief Audio/Video Podcasts, highlighting some trickier problems.
 
Send Daily/Weekly Messages, reminding students of pending due-dates and dead-lines.
 
Be Available to meet with students for questions, either in-person at
my office on UVM’s Campus or
in a video-chat via the Free Utility Google+ Hangouts. 
 
Respond to any emails or questions within 24 hours.
 
In general, help you become a better mathematics student.
Note: On-Line classes are quite different than face-to-face classes; however, many students find the method of instruction much more liberating, as it allows them to move at their own pace. I will have all materials available at the start of class to facilitate those students who prefer to work at a quicker pace. Please do not hesitate to contact me with any questions. You can choose to work at the pace stated in the schedule shown below, but if you would like to proceed at a quicker or slower pa
ce, please feel free to do so. However, please don’t forgo an
understanding of the material by moving at too quick of a pace. Lastly, if you feel that you are becoming overwhelmed by the material, please do not hesitate to send me an email, and I can work with you. Again, a majority of the effort in the class is put on
the student, so please don’t feel uncomfortable asking for help.
 Grading:
 The grading system is as follows:
 
QUIZZES (15%)
---There will be several multiple choice quizzes administered on BlackBoard. These quizzes will be designed to take about 30 minutes to complete and they will be administered periodically throughout the semester. The percentage grades from each of the quizzes will be averaged, and this quiz average will count towards 15% of the final grade.
Once a student completes a quiz, the answer key will become available.
 
ASSIGNMENTS (20%)
---There will be several assignments consisting of a many problems each administered on BB. These assignments will be designed to take several days to complete and you will be given an appropriate amount of time for each. The percentage grades from each of the assignments will be averaged, and this assignment average will count towards 20% of the final grade.
Once a student completes an assignment, the answer key will become available.
 
TESTS (40%)
---There will be two tests which and each will count towards 20% of the final grade.
 
TEST 1 will be taken once you have completed the following materials: Module 1 and Module 2.
 

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