This unit provides a rigorous mathematical development of compound interest theory, using calculus where appropriate, applying the theory to problems more complex than those encountered in ACST101. Topics include the force of interest and its relationship to interest rates, inflation and capital gains tax, discrete and continuous term certain annuities, project appraisal, loans, bonds, yield curves, matching and immunisation, pricing by the 'no arbitrage' assumption, and forward rate agreements. Students are assumed to be able to use the basic functionality of a spreadsheet package of their choice. The concepts developed in this unit are required in several subsequent units in the... -- Course Website
Instructor: Actuarial staff
Prerequisites: ACST101(Cr) and MATH133(P) and GPA of 2.50
