Faculty of Business and Economics

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This unit entry is for students who completed this unit in 2016 only. For students planning to study the unit, please refer to the unit indexes in the the current edition of the Handbook. If you have any queries contact the managing faculty for your course or area of study.

Monash University

6 points, SCA Band 3, 0.125 EFTSL

Undergraduate - Unit

Refer to the specific census and withdrawal dates for the semester(s) in which this unit is offered.


Business and Economics

Organisational Unit

Department of Econometrics and Business Statistics


Associate Professor Colin O'Hare



  • First semester 2016 (Day)


Financial mathematics under uncertainty will introduce the student to the ideas of interest rates, present values, cash flow modelling and profit testing in the context of certain payments and payments dependent on individual deaths or other uncertain risk.

Students will cover the topics of cashflow models, time value of money, real and nominal interest rates, present values and accumulated values, equations of value, survival models, life contingent products such as annuities and assurances, expected values and variances, and premium and reserving calculations.


The learning goals associated with this unit are to:

  1. understand the use of cashflow models to visualize a series of income and outgo within a financial context

  1. understand and be able to manipulate interest rates, to convert interest rates between effective and nominal and to appropriate interest rates to cashflows

  1. explain the concept of survival models

  1. understand mortality rates, the development of mortality tables and their use in pricing actuarial products

  1. understand the different types of actuarial products including annuity and assurance type products, their pricing and notation

  1. calculate net and gross premiums and reserves for various actuarial products

  1. explain the sequence of procedures that should be applied to analyse a given dataset.


Within semester assessment: 30%
Examination: 70%

Workload requirements

Minimum total expected workload to achieve the learning outcomes for this unit is 144 hours per semester typically comprising a mixture of scheduled learning activities and independent study. Independent study may include associated readings, assessment and preparation for scheduled activities. The unit requires on average three/four hours of scheduled activities per week. Scheduled activities may include a combination of teacher directed learning, peer directed learning and online engagement.

See also Unit timetable information

Chief examiner(s)