MA226-7-AU-CO:
Financial Mathematics
2025/26
Mathematics, Statistics and Actuarial Science (School of)
Colchester Campus
Autumn
Postgraduate: Level 7
Current
Thursday 02 October 2025
Friday 12 December 2025
15
29 August 2025
Requisites for this module
(none)
(none)
(none)
(none)
MA311
This module aims to provide a grounding in financial mathematics and its simple applications.
It covers Units 1, 2 & 3 of the required material of CM1 (Actuarial Mathematics, Core Principles) by the Institute and Faculty of Actuaries (IFoA).
The aims of this module are:
- To introduce the basics of actuarial modelling centred on deterministic models and their applications to financial
- To introduce the theory of interest and the consideration of cashflow models, investment decisions, annuities and their applications.
- To introduce the Capital Gains Tax and the term structure of bonds.
By the end of the module, students will be expected to:
- Demonstrate deep knowledge and comprehensive understanding of the principles required for actuarial modelling.
- Apply underlying concepts and principles of generalised cashflow models to describe financial transactions.
- Express interest rates in different time periods, and extend the techniques where appropriate to allow for inflation.
- Demonstrate deep knowledge and systematic understanding of real and money interest rates.
- Calculate time value of money using both compound interest and discounting, and extend the techniques where appropriate to allow for inflation.
- Calculate present value and accumulated value for a given stream of equal or unequal payments using specified rates of interest.
- Derive the compound interest functions (where payments can be in advance or in arrears).
- Demonstrate deep knowledge and critical understanding of factors influencing the term structure of interest rates.
- Calculate spot rates, forward rates, par yield and yield to maturity.
- Apply and discuss the Redington’s theory of immunisation by calculating the present value, the duration and the convexity of cashflows.
- Define an equation of value.
- Use the concept of equation of value to solve various practical problems.
- Apply underlying concepts and principles in order to show how discounted cashflow and equation of value
- Apply cashflow and equation of value techniques in project appraisals.
- Demonstrate deep knowledge and critical understanding of how to implement financial mathematics in Microsoft Excel spreadsheet and to become adept in using some of Excel's built-in financial and statistical functions and other useful tools.
Indicative syllabus
- Theory of interest rates:
- 1.1 Interest rates in different time periods.
- 1.2 Time value of money.
- 1.3 Extend 1.1 and 1.2 to account for inflation.
- 1.4 Cashflow model for financial instruments and insurance contracts.
- 1.5 Present value and accumulated value of cashflows.
- 1.6 Annuity and accumulation function evaluation.
- 1.7 Term structure of interest rates.
- 1.8 Immunisation of cashflows.
- Equation of value and its application:
- 2.1 The concept of an equation of value.
- 2.2 Solve practical problems using the equation of value.
- 2.3 Project appraisal using the equation of value.
This module will be delivered via:
- Lectures – 33 hours
- Labs – 5 hours
This module does not appear to have a published bibliography for this year.
Assessment items, weightings and deadlines
| Coursework / exam |
Description |
Deadline |
Coursework weighting |
| Coursework |
Lab Test |
09/12/2025 |
|
| Exam |
Main exam: In-Person, Open Book (Restricted), 180 minutes during Summer (Main Period)
|
| Exam |
Reassessment Main exam: In-Person, Open Book (Restricted), 180 minutes during September (Reassessment Period)
|
Exam format definitions
- Remote, open book: Your exam will take place remotely via an online learning platform. You may refer to any physical or electronic materials during the exam.
- In-person, open book: Your exam will take place on campus under invigilation. You may refer to any physical materials such as paper study notes or a textbook during the exam. Electronic devices may not be used in the exam.
- In-person, open book (restricted): The exam will take place on campus under invigilation. You may refer only to specific physical materials such as a named textbook during the exam. Permitted materials will be specified by your department. Electronic devices may not be used in the exam.
- In-person, closed book: The exam will take place on campus under invigilation. You may not refer to any physical materials or electronic devices during the exam. There may be times when a paper dictionary,
for example, may be permitted in an otherwise closed book exam. Any exceptions will be specified by your department.
Your department will provide further guidance before your exams.
Overall assessment
Reassessment
Module supervisor and teaching staff
Dr Daniel Ahelegbey, email: d.f.ahelegbey@essex.ac.uk.
Dr Daniel Ahelegbey, Dr Jianya Lu
maths@essex.ac.uk
Yes
Yes
Yes
Available via Moodle
Of 43 hours, 37 (86%) hours available to students:
4 hours not recorded due to service coverage or fault;
2 hours not recorded due to opt-out by lecturer(s), module, or event type.
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