Financial Mathematics

Portuguese

Math

The teaching of the course is based on recent bibliography and on experience gained through practice. The course’s pedagogy is strongly interactive. It seeks substantial student participation and know-how-based learning. Emphasis is placed on helping students report concepts, ideas and theories to current practice.

At the end of the course, the student must be able to:

– Apply the methods of calculation related to financial transactions and lending;

– Identify the various possibilities of financing available to private and public entities.

– Identify the determinants of the financial costs inherent to the various forms of financing.

– Produce and interpret maps and other kinds of documents related to the sources of financing.

PART I – Capitalization and discount operations

1 –Interest, financial transaction, and interest rate

2 – Capitalization schemes

         2.1 – Simple capitalization scheme

         2.2 – Compound capitalization scheme

         2.3 – Continuous capitalization regime

3 – Calculation of interest in banking practice

4 – Confrontation between the various capitalization schemes

5 – Forms discount

         5.1 – Desconto por dentro

         5.2 – Desconto por fora

         5.3 – Desconto composto

Parte II – Interest rates

1  – General inquiries

   2 – Proportional and equivalent rates

3 – Nominal and effective rates

4 – Average rate of application

5 – The effect of taxation: gross rates and net rates

6 – Annual effective rate of charge

Parte III – Capital equivalence

1 – Equation of equivalence

2 – Assessment rate

PART IV – Annuities

1 – Concept and characteristics of annuities

2 – Kinds of annuities

3 – Two key cases

         3.1 – Constant terms amortization annuities

         3.2 – Constant terms accumulation annuities

4 – Anticipated annuities

5 – Deferred annuities

6 – Fractional annuities

7 – Perpetuities of constant terms

 PART V – Short-term financing sources

1 – Bill notes discount

         1.1 – Concept and characteristics of letters

         1.2 – letter discount

         1.3 – Concept and characteristics of promissory notes

2 – Effective cost of discount

3 – Reform operations

 PART VI – Sources of long-term financing

1 – Classic loans

         1.1 – Notion and characteristics of classic loans

         1.2 – Loan amortization systems (one-off amortization and periodic repayments)

         1.3 – Construction of amortization tables

         1.4 – Confrontation between amortization systems with periodic repayments

Regarding the assessment methodology, students have two options:

1. DISTRIBUTED ASSESSMENT

1.1 Through a system of distributed assessment consisting of two tests, each lasting 90 minutes.

1.2 Each test will be graded on a scale of 0 to 20. Students must obtain a minimum score of 8 (without rounding) in each test.

1.3. Students will pass when the arithmetic average of the two test results is a classification equal to or greater than 9.5 on a scale of 0 to 20.

1.4. Access to this form of assessment is subject to attendance in at least 75% of the classes (there is no possibility of justifying absences).

2. FINAL EVALUATION

2.1. Through a final exam, as defined in the Regulations of the 1st Study Cycle of ISCAC. Students who obtain a classification equal to or greater than 10 points will be approved. The written exam will cover all the subjects taught and will have a duration of 2 hours

Important note: Students who choose the assessment modality indicated in 1) and who do not obtain a final grade equal to or greater than 10 points may take the regular period exam included in the assessment modality 2).

NAO