Module Specifications.
Current Academic Year 2024 - 2025
All Module information is indicative, and this portal is an interim interface pending the full upgrade of Coursebuilder and subsequent integration to the new DCU Student Information System (DCU Key).
As such, this is a point in time view of data which will be refreshed periodically. Some fields/data may not yet be available pending the completion of the full Coursebuilder upgrade and integration project. We will post status updates as they become available. Thank you for your patience and understanding.
Date posted: September 2024
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None Excel lab exam |
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Description MS318 aims to provide students with a grounding in financial mathematics and its related applications, particularly the calculation of present and accumulated values for various streams of cash flows. The module covers simple investment and insurance contracts, interest rate theory including the term structure of interest rates and immunisation theory. The module develops best practice in data analysis and modelling for financial applications and will build on material in module MS119 in the development of financial models and solving equations of value using Excel. | |||||||||||||||||||||||||||||||||||||||||||
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Learning Outcomes 1. Describe the principles underlying financial and actuarial modelling techniques and incorporate best practice in the development of financial models. 2. Build cashflow models for simple investment and insurance contracts and develop and solve equations of value using these cashflow models. 3. Demonstrate an understanding of effective and nominal interest and discount rates and the relationship between them. 4. Describe and solve elementary compound interest problems and problems involving the term structure of interest rates. 5. Demonstrate an understanding of Redington’s theory of immunisation. 6. Apply discounted cashflow techniques for project appraisals. | |||||||||||||||||||||||||||||||||||||||||||
All module information is indicative and subject to change. For further information,students are advised to refer to the University's Marks and Standards and Programme Specific Regulations at: http://www.dcu.ie/registry/examinations/index.shtml |
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Indicative Content and Learning Activities
Actuarial and Financial ModellingData sources and exploratory data analysis; model choice; deterministic v stochastic models; assumption setting; sensitivity analysis; scenario-based and proxy models; model review and development; interpreting and communicating results.Theory of Interest RatesInterest and discount rates; effective and nominal rates; force of interest; present and accumulated values; compound interest functions; level and increasing annuities and accumulations; term structure of interest rates; immunisation.Equations of Value for Financial ProblemsLoan schedules; Bond prices and yields allowing for income and capital gains tax, optional redemption dates and inflation (real and nominal rates). Solving complex equations of value using Excel.Project AppraisalDiscounted cashflow techniques; net present value calculations; use of internal rate of return and payback period in project appraisal. Excel models for project evaluation and comparisons. | |||||||||||||||||||||||||||||||||||||||||||
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Indicative Reading List
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Other Resources None | |||||||||||||||||||||||||||||||||||||||||||