Offered
Clayton Second semester 2008 (Day)
Synopsis
Topics covered in this unit include: an introduction to mathematics of finance, applications to debt markets, in particular the Australian annuity, short-term money market and capital markets; economic factors affecting the yield curve; interest rate risk management by immunisation; life contingencies, the mortality table, actuarial bases, life annuities, assurances, valuation of life interests, optimal conversion of lump sum to a retirement income stream, and retirement income streams.
Objectives
The learning objectives of this unit are to:
- describe conventions used in short term money and capital markets, and explain the implications for pricing of products in these markets;
- explain use and limitations of mortality tables in valuation of life contingent products, especially retirement income streams;
- apply quantitative skills required for pricing and risk management associated with money, capital and retirement income stream markets;
- apply critical thinking, problem solving and presentation skills to individual and/or group activities dealing with debt markets and fixed income securities.
Assessment
Within semester assessment: 20%
Examination (2 hours): 80%
Contact hours
Three hours per week
Prerequisites
AFC1100 or AFC2100
