Module Overview

Introduction to Financial Mathematics

The module introduces the learner to the mathematics of Finance, including interest rates and future and present values. The methods of financial markets are examined, especially in the context of financial derivatives. Different methods for valuing these derivatives are considered. 

Module Code

MATH 3808

ECTS Credits


*Curricular information is subject to change

Risk management

Hedging, arbitrage.

The time value of money

Simple and compound interest, present and future values, discount factors, net present value, rate of return, annuities.

Financial Markets

Introduction to financial markets: derivatives, forwards and futures, options, swaps.

Pricing techniques

Replication, the Law of One Price, the Arbitrage Theorem.

Discrete/continuous pricing models

The Binomial Model, introduction to Brownian motion and Black-Scholes.

Software Packages

Use of mathematical packages to model financial instruments.

Lectures supported by problem-solving sessions and the use of mathematical software packages.

Module Content & Assessment
Assessment Breakdown %
Formal Examination70
Other Assessment(s)30