Course: Financial Mathematics

Code: 3ФЕИТ08035

ECTS points: 6 ЕКТС

Number of classes per week: 3+0+0+3

Lecturer: Prof. Dr. Biljana Jolevska – Tuneska

Course Goals (acquired competencies): Upon completing the course, the student demonstrates an understanding and knowledge of the fundamentals of financial mathematics. Also, the student is trained to independently analyze mathematical models in finance, as well as to apply different models and techniques for solving specific financial problems.

Course Syllabus: Simple and compound interest. Time value of money. Basic function of compound interest. Discounted cash flow. Simple stochastic interest models. Introduction to a simple market model. A one period binary model. Risk and recovery. Future contracts. Call and put options. Risk management with these options. Discrete financial models. A multiple period binary model. More dimensional Black-Scholes model. The main theorem of finance.

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