Financial Mathematics

Inglês

 Math

Inglês

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.

Inglês

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 with the sources of financing.

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PART I – BASIC CONCEPTS

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

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

 III – Equivalência de capitais

1 – Equation of equivalence

2 – Assessment rate

 PART II – 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 III – 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 IV – Sources 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

NAO

Inglês

1)    Quelhas, A. P. & Correia, F. (2017). Manual de Matemática Financeira, Coimbra: Almedina (4.ª edição, reimpressa).

2)    Matias, R. (2018). Cálculo Financeiro – Teoria e Prática, Escolar Editora (6.ª edição).

3)    Alves, C., Ribeiro, C., Farinha, J. & Alves, R. (2019). Cálculo Financeiro Aplicado. Coimbra: Almedina.

4)    Nicolau, I. & Rodrigues, J. A. (2010). Elementos de Cálculo Financeiro. Áreas Editora.

5)    Quelhas, A. P. (2019). Mathematics of Finance. Almedina (em versão e-book).