UID:
edoccha_9961089637402883
Format:
1 online resource (613 pages) :
,
illustrations
ISBN:
0-12-801759-7
,
0-12-801580-2
Content:
Lays a foundation of intuitive analysis of financial concepts early in the course, followed by a more detailed and nuanced treatment in later chapters. It introduces major financial concepts through real situations, integrates active learning, student focused explorations and examples with Excel spreadsheets and straightforward financial calculations. It is organized so sections can be read independently or through in-class guided-discovery activities and/or interactive lectures. Focusing on conceptual understanding to maximize comprehension and retention, using modern financial analysis tools and utilizing active learning, the book offers a modern approach that eliminates tedious and time-consuming calculations initially without underestimating the ability of readers.
Note:
Includes index.
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Front Cover -- A Spiral Approach to Financial Mathematics -- Copyright Page -- Contents -- Preface -- Why the Changes in Content Sequencing? -- What About Changes in Pedagogy? -- Student Audience and How to Utilize the Materials -- Students Hoping to Gain a Solid Understanding of Financial Mathematics Concepts -- Students Hoping to Pass Actuarial Certification Exam FM -- To All Students -- To the Actuary Student -- Unit 1 Introduction to Financial Mathematics -- 1. Savings: Fundamentals of Interest -- Section 1.1. Simple and compound interest -- Learning objectives -- Example 1.1. Saving Money to Study Abroad -- Interest over longer periods -- Exploration 1.1. Saving for Your First Car -- Interest over longer periods -- Turning to technology: Excel -- Summary -- Homework Questions: Section 1.1 -- Conceptual questions -- Practice questions -- Application questions -- Looking ahead -- Section 1.2. Changing the Compounding Period: Nominal vs Effective Interest Rates -- Learning objectives -- Example 1.2. Saving Money to Study Abroad (Revisited) -- Nominal versus effective interest rates -- Back to the saving for study abroad example -- Exploration 1.2. Saving for Your First Car (Revisited) -- Changing the period over which interest Is computed -- Nominal versus effective interest rates -- Back to the car example -- Summary -- Homework Questions: Section 1.2 -- Conceptual questions -- Practice questions -- Application questions -- Looking ahead -- Section 1.3. Valuing Accounts with Multiple Transactions -- Learning objectives -- Example 1.3. Saving for a Down Payment on a House -- Basic account chart -- Creating a dynamic account chart using Excel -- What if you saved 900/month instead? -- How much would you need to save each month to reach your goal within 18 months? -- What about an extra deposit? -- Exploration 1.3. Saving for College.
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Getting started -- Basic account chart for college savings -- Begin filling in the account chart -- Revisiting nominal rates of interest -- Creating a dynamic account chart using Excel -- Summary -- Homework Questions: Section 1.3 -- Conceptual questions -- Practice questions -- Application questions -- Looking ahead -- Section 1.4. Tips and Tricks for Solving Cash Flow Problems -- Learning objectives -- Example 1.4. Saving for a Down Payment (Revisited) -- Nonrecursive approach -- Evaluating the impact of a withdrawal -- Irregular payments and withdrawals -- Problems involving an unknown interest rate -- Problems involving an unknown time period -- Exploration 1.4. Saving for College (Revisited) -- Recursive approach -- Nonrecursive approach -- Irregular payments and withdrawals -- Problems involving an unknown interest rate -- Problems involving an unknown time period -- Summary -- Homework Questions: Section 1.4 -- Conceptual questions -- Practice questions -- Application questions -- Looking ahead -- End of chapter summary -- End of chapter review problems -- 2. Loans: Fundamentals of Borrowing and Lending -- Section 2.1. Introduction to Loans -- Learning Objectives -- Example 2.1. Paying Back a Student Loan -- Loan Terminology -- Paying Off the Interest Over Time -- Amortization -- How Much Does Your 3,500 Actually Cost You? -- Exploration 2.1. So, You Want to Buy a Car… -- What is a Loan and How Does It Work? -- Paying Off the Interest Over Time -- Amortization -- Using Excel Functions and Online Loan Calculators to Simplify Loan Computations -- Summary -- Homework Questions: Section 2.1 -- Conceptual Questions -- Practice Questions -- Application Questions -- Looking Ahead -- Section 2.2. Refinancing a Loan -- Learning Objectives -- Example 2.2. Paying Back a Student Loan (Revisited) -- Refinancing.
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Exploration 2.2. So, You Want to Buy a Car… (Revisited) -- Understanding Amortization -- Refinancing -- Summary -- Homework Questions: Section 2.2 -- Conceptual Questions -- Practice Questions -- Application Questions -- Look Ahead -- Section 2.3. Sinking Funds -- Learning Objectives -- Example 2.3. Paying Back a Personal Loan -- Interest Rate Comparisons Between Sinking Funds and Amortized Loans -- A Direct (Shortcut) Formula to Compute Sinking Fund Payment Sizes -- Exploration 2.3. Buying a House With an Interest-Only Loan -- A Sinking Fund Savings Account -- Sinking Funds With Different Terms -- A Direct (Shortcut) Formula to Compute Sinking Fund Payment Sizes -- Summary -- Homework Questions: Section 2.3 -- Conceptual Questions -- Practice Questions -- Application Questions -- Prove It! Questions -- End of Chapter Summary -- End of Chapter Review Problems -- 3. Annuities: Fundamentals of Regular Payments -- Section 3.1. Perpetuities -- Learning Objectives -- Example 3.1. Living on the Interest: Perpetuities in Retirement -- Exploration 3.1. Living on the Interest: Perpetuities at College -- Summary -- Homework Questions: Section 3.1 -- Conceptual Questions -- Practice Questions -- Application Questions -- Looking Ahead -- Section 3.2. Basic Annuities -- Learning Objectives -- Example 3.2. Planning for Retirement -- A Direct (Shortcut) Formula to Compute Account Balances and Payment Sizes for Annuities -- Discount Factor -- Exploration 3.2. Using a Life Insurance Payout as a Basic Annuity -- A Direct (Shortcut) Formula to Compute Account Balances and Payment Sizes for Annuities -- Discount Factor -- Summary -- Homework Questions: Section 3.2 -- Conceptual Exercises -- Practice Exercises -- Application Exercises -- Prove It! -- End of Chapter Summary -- End of Chapter Exercises -- 4. Stocks and Bonds: Fundamentals of Investment Strategies.
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Section 4.1. Bonds -- Learning objectives -- Example 4.1. Investing 1 Million -- Zero-coupon bonds -- A bond with coupons -- Coupon rate -- A formula for bond pricing -- What size bond can you actually afford? -- Exploration 4.1. Launching a New Product Line -- Zero-coupon bonds -- A bond with coupons -- Coupon rate -- A formula for bond pricing -- Summary -- Homework Questions: Section 4.1 -- Conceptual questions -- Practice questions -- Application questions -- Prove it! -- Section 4.2. Buying and Selling Bonds -- Learning objectives -- Example 4.2. Investing 1 Million (Revisited) -- Yield rate vs coupon rate -- Selling at a premium, discount, and par -- Bond markets and changing yield rates -- Exploration 4.2. Starting a New Product Line (Revisited) -- Selling bonds -- Yield rate vs coupon rate -- Selling at a premium, discount, and par -- Bond markets and changing yield rates -- Summary -- Homework Questions: Section 4.2 -- Conceptual questions -- Practice questions -- Application questions -- Section 4.3. Stocks -- Learning objectives -- Example 4.3. Investing 1 Million in the Stock Market -- Stock -- Exploration 4.3. Raising Money by Selling Ownership in the Company -- Cash flow approach to value investments -- Stock -- Summary -- Homework Questions: Section 4.3 -- Conceptual questions -- Practice questions -- Application questions -- End of Chapter Summary -- End of Chapter Exercises -- 5. Portfolios: Fundamentals of Collections of Assets and Liabilities -- Section 5.1. Yield Rates on a Portfolio -- Learning objectives -- Example 5.1. Timing a Market Investment -- 1 year later -- Another year later -- Dollar-weighted yield rate -- Time-weighted yield rate -- Comparing dollar-weighted and time-weighted yield rates -- Exploration 5.1. Playing the Bond Market -- Investment strategy 1 -- What will you do now? -- Dollar-weighted yield rate.
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What if…? -- What if…? -- Time-weighted yield rate -- Time-weighted yield rate if you buy another bond -- Comparing dollar-weighted and time-weighted yield rates -- Summary -- Homework Questions: Section 5.1 -- Conceptual questions -- Practice questions -- Application questions -- Section 5.2. Changing Yield Rates on a Portfolio -- Learning objectives -- Example 5.2. How Risky is My Portfolio? -- Summarizing price sensitivity: Macaulay duration -- Computing the Macaulay duration for the entire portfolio -- Exploration 5.2. Evaluating Portfolio Risk -- Summarizing price sensitivity: Macaulay duration -- Computing the Macaulay duration for the entire portfolio -- Summary -- Homework Questions: Section 5.2 -- Conceptual questions -- Practice questions -- Application questions -- Looking ahead -- Section 5.3. Strategies to Mitigate Portfolio Risk -- Learning objectives -- Example 5.3. Getting Ready to Payback a Bond Debt -- Looking into investment options in the bond market -- Cash-flow matching -- Buying 2-year bonds -- Buying 4-year bonds -- Evaluating interest-rate risk -- Duration matching -- Concluding Remarks -- Exploration 5.3: Anticipating Paying Back a Loan -- Cash-flow matching -- Buying bonds with different payoff times -- Duration matching -- Comparing all of the different scenarios -- Concluding Remarks -- Summary -- Homework Questions: Section 5.3 -- Conceptual questions -- Practice questions -- Application questions -- End of Chapter Summary -- End of Chapter Exercises -- Unit 2 Revisiting Topics in Financial Mathematics -- 6. Savings Revisited -- Section 6.1. Force of Interest -- Learning objectives -- Example 6.1. Which Investment Will You Choose? -- Changing the force of interest -- Generalizing the idea of force of interest (requires calculus) -- Exploration 6.1. Choosing Between Investments With Different Compounding Periods.
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Changing the force of interest.
Language:
English
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