Official government website of the Government of Kingdom of Saudi Arabia
Link to official Saudi websites end with edu.sa

All links to official educational websites in the Kingdom of Saudi Arabia end with sch.sa or edu.sa

Government websites use the HTTPS protocol for encryption and security.

Secure websites in the Kingdom of Saudi Arabia use the HTTPS protocol for encryption.

Registered with the Digital Government Authority under number:

20250417892
Main
UQU Programs
Actuarial Science and Financial Mathematics

Financial Mathematics

MTHF2703
4 hours English

Financial Mathematics

Financial Mathematics
MTHF1701 Principles of financial mathematics
4 hours No requisites
1 Time Value of Money / a. interest rate (rate of interest), simple interest, compound interest accumulation function, future value, current value, present value, net present value, equation of value. / b. discount factor, discount rate (rate of discount), convertible m-thly, nominal rate, effective rate, inflation and real rate of interest, force of interest
2 Annuities/cash flows with payments that are not contingent / a. Level annuity, finite term / b. Level perpetuity / c. Non-level annuities/cash flows / i) Arithmetic progression, finite term / ii) Arithmetic progression, perpetuity / iii) Geometric progression, finite term / iv) Geometric progression, perpetuity / v) Other non-level annuities/cash flows
3 Loans / a. Principal, interest, term of loan. / b. Outstanding balance, final payment (drop payment, balloon payment). / c. Amortization. d. Sinking fund
4 General Cash Flows and Portfolios Continuous Life Annuities / a. Yield rate/rate of return, dollar-weighted rate of return, time-weighted rate of return, current value. / b. Duration (Macaulay and modified), convexity (Macaulay and modified), portfolio, / c. Spot rate, forward rate, yield curve, stock price, stock dividend
5 Interest Rate Swaps / a. swap rate, swap term or swap tenor, notional amount, / b. market value of a swap, settlement dates, settlement period, counterparties, / c. deferred swap, amortizing swap, accreting swap, interest rate swap net payments
1.1 Mapped to: K2

Demonstrate the effective interest rate, the nominal interest rate convertible m-thly, the effective discount rate, the nominal discount rate convertible mthly, or the force of interest.

Teaching Strategy Lecture Tutorials Individual or group work
Assessment Methods Direct: Exams, quizzes
1.2 Mapped to: K3

Develop and describe models that apply the concept of annuities to the valuation and analysis of loans and bonds using principles from financial mathematics.

Teaching Strategy Lecture Tutorials Individual or group work
Assessment Methods Direct: Exams, quizzes
2.1 Mapped to: S1

Identify, formulate, and solve the value equation given a set of cash flows and an interest rate.

Teaching Strategy Problem solving strategy
Assessment Methods Direct: Exams, quizzes
2.2 Mapped to: S2

Evaluate an investment portfolio to fully immunize, to match present value and duration, and portfolio to exactly match the set of liability cash flows.

Teaching Strategy Problem solving strategy
Assessment Methods Direct: Exams, quizzes
2.3 Mapped to: S3

Communicate and present financial mathematics to others, both in oral and written form clearly and in a wellorganized manner.

Teaching Strategy Problem solving strategy
Assessment Methods Direct: Exams, quizzes
3.1 Mapped to: V1

Collaborate with the team to perform tasks with responsibility.

Teaching Strategy Discussion and dialogue Critical thinking
Assessment Methods Direct: Homework exam
3.2 Mapped to: V2

Maintain confidentiality by applying knowledge gained during the course using computer applications

Teaching Strategy Discussion and dialogue Critical thinking
Assessment Methods Direct: Homework exam
Assessment
Weight
Homework’s, Quizzes, Mini projects
20%
Midterm
30%
Final Exam
50%
Total
100%