London Metropolitan University Research Institutes
 

LFA130 Introduction to Financial Mathematics I

1. Course Overview

This one-day programme has been specifically designed for delegates who need to develop an understanding of the mathematics fundamental to finance. The programme will provide the essential mathematical skills required to price many financial assets and assess investment cash flows

2. Who will gain from the course

The course is ideally suited to both graduates and non-graduates recently joining the financial services industry. Most participants will be graduates but will have little knowledge of financial mathematics. The course will be especially relevant to those with jobs in back office and support staff, staff in HR, graduate trainees and new entrants, IT and IT support staff, financial recruitment staff, public relations staff, legal staff and assistants.

3. Prerequisite Knowledge Required

GCSE Mathematics A-C, or equivalent, and a basic knowledge of Excel.

4. Structure of the Course

Discounting, compounding and valuing various assets

  • Compounding: rules of exponents, future values, discrete and continuous time compound interest and the natural exponent.
  • Discounting: the time value of money, present values and discounted cash flows, annuities and perpetuities, a simple example of valuing coupon and non-coupon paying bonds and an example of pricing a forward contract (the underlying asset pays no income stream).
  • The basis of investment appraisal: net present value and the internal rate of return.
  • Valuing a share as discounted dividend cash flows: the dividend valuation model.

Workshop exercise: calculating the future values of investments using discrete and continuous compounding; calculating the net present value and internal rate of return of a stream of cash flows; examples of the principles of calculating the values of various assets.

5. Course Delivery

Teaching will take place in dedicated seminar rooms and IT labs. Courses will normally be delivered to small groups of up to 15 participants to facilitate learning.

6. Benefits

This course will extend your knowledge and introduce you to some fundamental tools so that you will be able to:

  • Understand compounding and the differences between discrete and continuous compounding method
  • Understand the concept of the time value of money and discounting
  • Understand and calculate the net present value and internal rate of return of a stream of cash flows
  • Understand the principles of valuing shares, bonds and forward contracts and appreciate how they may be calculated.

7. Venue
London Financial Academy,
London Metropolitan University,
84 Moorgate,
London EC2M 6SQ






 

   Page last updated 07 October 2011