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# University of Vermont Course Outline Spring 2014 Course: Math 183 Fundamentals of Financial Mathematics OL1 (14562)

## Instructor: Joe Kudrle (Its an old Czech name pronounced Cudderly.)

Office: 302 Lord House (16 Colchester Avenue is the addressIts the Cream/Green building across the street from the Center Theatre/Ira Allen Chapel.)

E-mail: jkudrle@uvm.edu

## 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 requiredI do not have a formal background 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 availablesee 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: bb.uvm.edu

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 UVMs 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 pace, please feel free to do so. However, please dont 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 dont feel uncomfortable asking for help.

TEST 2 will be taken once you have completed the following materials: Module 3 and Module 4. Following the completion of the stated sections, a student will request a copy of the appropriate Test using the BlackBoard system. Once the Test has been delivered, the student will have 72 hours to complete the test and return it to the instructor using one of the following methods: Email a scanned version (PDF or Image File) of the completed test and work. Hand deliver the test to the instructors office on UVMs Campus --- see page (1).

FINAL EXAM (25%)---There will be a cumulative Final Exam given at the end of the semester. The Final Exam will count towards 25% of your final grade. Following the completion of the course materials, a student will request a copy of the Final Exam using the BlackBoard system. Once the Final Exam has been delivered, the student will have 72 hours to complete the exam and return it to the instructor using one of the following methods: Email a scanned version (PDF or Image File) of the completed test and work. Hand deliver the test to the instructors office on UVMs Campus --- see page (1). Note: Based on the above given grading formula, you will end the class with a percentage grade. Depending on the value of this percentage grade, I will use the following table to issue your Class Grade. All ASSIGNMENT, QUIZ, TEST and FINAL EXAM grades will be posted on the BlackBoard System. A+ 100 B+ 87 89 C+ 77 79 D+ 67 69 A 94 99 B 83 86 C 73 76 D 63 66 A- 90 93 B- 80 82 C- 70 72 D- 60 62

Office Hours: I am more than happy to work with students face-to-face in my UVM Office or via the internet using the free software Google+ Hangouts. More info on this can be found on the Course BlackBoard Page.

Academic Assistance: Students with documented learning disabilities are entitled by law to certain reasonable accommodations. If you have a documented reason for special accommodations, you must provide written evidence of this as soon as possible from the appropriate office. Further info can be found at the Academic Support Program Offices.

Late Work: The schedule included below lists recommended dates to complete each ASSIGNMENT, QUIZ and TEST, and this will set a general pace for the course. However, as I stated previously, please do not hesitate to move at a quicker or slower pace if you feel so inclined.

Again, I will have all course materials open and ready to use at the start of the semester, and these materials will remain open for the entire semester. Some examples of how students have progressed in the past: Follow the stated schedule. Completed a majority of work on weekday evenings, keeping weekends free. Completed a majority of work on weekends, keeping weekdays free.

Class Schedule: Here is a schedule, including the suggested dates for the ASSIGNMENTS, QUIZZES, and TESTS. Please note that all materials are available at the start of the semester, so please feel free to move at your own pace.
Week Jan. 12 Jan. 18 Materials
Module 1 Lecture 1 Module 1 Lecture 2 Quiz (1) Module 1 Lecture 3 Module 1 Lecture 4 Quiz (2) Assignment (1) Module 2 Lecture 1 Module 2 Lecture 2 Quiz (3) Module 2 Lecture 3 Module 2 Lecture 4 Quiz (4) Assignment (2)

## Week Feb. 16 Feb. 22

Materials
Module 3 Lecture 1 Module 3 Lecture 2 Quiz (5) Module 3 Lecture 3 Module 3 Lecture 4 Quiz (6) Assignment (3) BREAK - NO SCHOOL

## Week Mar. 23 Mar. 29

Materials
Review and TEST 1

Jan. 19 Jan. 25

Feb. 23 Mar. 1

Mar. 30 Apr. 5

Module 5 Lecture 1 Module 5 Lecture 2 Quiz (9) Module 5 Lecture 3 Module 5 Lecture 4 Quiz (10) Module 5 Lecture 5 Module 5 Lecture 6 Quiz (11) Assignment (5)

Jan. 26 Feb. 1

Mar. 2 Mar. 8

Apr. 6 Apr. 12

Feb. 2 Feb. 8

Mar. 9 Mar. 15

Module 4 Lecture 1 Module 4 Lecture 2 Quiz (7) Module 4 Lecture 3 Module 4 Lecture 4 Quiz (8) Assignment (4)

Apr. 13 Apr. 19

Feb. 9 Feb. 15

## Review and TEST 1

Mar. 16 Mar. 22

Apr. 20 Apr. 26

Review

FINAL EXAM As stated above, a student can choose to move at a more accelerated pace than the suggested schedule. However, the completed Final Exam must be returned no later than May 9, 2014 by 4:00 PM.