FINANCIAL MATHEMATICS PROBLEMS FOR BUSINESS

This course belongs to the characterizing teaching activities of the master degree "Management" in the curriculum Accounting and Finance. In line with the educational objectives of the course, this activity provides concepts and methods from financial mathematics and aims at providing notions and operational abilities that enable to analyse and solve the main financial problems that arise in business with a particular focus on internationally oriented firms. Attention is devoted to computations skills which will be used to solve case studies and examples (using also spreadsheet financial functions).

Knowledge and understanding skills.
Attendance and active participation in lectures, online activities, exercise sessions, group works, together with the individual study will allow the student to acquire the following knowledge and understanding skills:
- know and use the concepts necessary to describe and understand financing and investment instruments available to firms;
- know the mathematical techniques and methods useful to formalize financial decisions.

Ability to apply knowledge and understanding.
Through the interaction with the instructors, the tutors, and peers and through the individual study the student acquires the following abilities:
- know how to use quantitative tools to cope with financial operations;
- know how to choose the most appropriate technique in order to solve the concrete problem under analysis;
- know how to analyze and discuss specific financial situation presented in the form of case studies.


Judgment skills, communication skills, learning skills.
Regarding the autonomy of judgment, communication skills and learning abilities, through the personal and group study of the concepts seen in class, the student will be able to:
- formulate rational justifications for and support with argomentations the approach used to analyze financial problems and situations; - understand relative strengths and weaknesses of valuation approaches;
- know how to formulate and communicate an adequate analysis and financial interpretation of mathematical models and tools used.

Standard topics covered in bachelor courses of Mathematics and Computational tools for economics and Management are assumed to be known.

- Elements of financial mathematics with emphasis on a cash flow approach: time value of money, simple interest, compound interest, present value, future value, inflation.
- Annuities, Sinking funds, Mortgages.
- Fixed income securities, valuation of bonds and elements of term structure of interest rates (spot rates, discount factors, forward rates).
- Duration and bond portfolio immunization.
- Exchange rate risk and its effects on profitability of financial operations.
- Evaluation and management of alternative opportunities.
- Capital budgeting.
- Spreadsheet financial functions.

1. S.T. Karris, Mathematics for Business, Science and Technology, with Matlab and Excel computations, 3rd Ed. Orchard Publication, Chapter 'Mathematics of Finance and Economics' (resource available online from BEC website).
2. D.G. Luenberger, Investment Science, Oxford University Press, 2012 (part I).
3. Lecture notes.

Evaluation is based on a final written exam based on the solution of three exercises and two open questions. Each exercise provides 8 points, each question is worth 3 points, so that the total amount of available points is 30. They are used to verify the knowledge and skills related to the entire program.

The exam is evaluated on a 30-point basis.
The final exam is unique and is considered passed with the achievement of 18 total points over 30.

The entire course covers 30 academic hours of teaching with traditional lectures.

English

Students are required to register for the course on the moodle platform of the university (moodle.unive.it).

written

This subject deals with topics related to the macro-area "Human capital, health, education" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development