Certificate in Financial Maths & Modelling Syllabus
Overview The Certificate in Financial Maths & Modelling provides a rigorous and integrated set of quantitative tools to understand and ex plain financial instruments, financial risk and corporate value and the fundamentally important relationship between them. The emphasis throughout is on t he practical modelling of real life problems and opportunities. Techniques such as no-arbitrage pricing, duration, convexity and portfolio analysis - including the trade-off between risk and return - are explained and applied. The course analyses the use of options for financial risk management, and the valuation of different types of option using binomial pricing models, the Black Scholes model and other techniques. It also int roduces and applies Value at Risk measures, their potential us es and their limitations.

Study Unit 1 - Fundamental concepts in financial maths and modelling Study Unit 1 introduces the fundamental concepts of financial maths and modelling in the five areas of: interest rat e mathematics; modelling the values of a series of fixed or growing future cashflows; modelling the term structure of int erest rates using no arbitrage relationships; selected issues in probability and statistical models; and modelling the maths of Value at Risk. Study Unit 2 - Modelling the maths of debt Study Unit 2 looks at modelling the maths of debt in the main areas of: present values, fut ure cash flows, timing and risk; and interest rat e sensitivity and duration models, in particular value relationships with respect to yield, maturity, coupon rate and coupon frequency.

Study Unit 3 - Modelling the maths of foreign exchange Study Unit 3 introduces the c oncepts of modelling t he maths of foreign exchange in the four areas of: quoting conventions; hedging using forward foreign exchange cont racts; the relationships bet ween foreign exchange rates, interest rates and inflation rates and applying VaR to foreign...

...1. Interest rate can affect both of the income and the price of assets of the financial instruments.If the interest rate goes higher,the amount of financial instruments’loan and their acquiring funds will get less.Meanwhile,the price of stock and bonds that any financial instruments had owned will go down.Conversely,the sentence above also established.So that a change in interest rate can affect the profitability of financial institutions.
2. The Federal Reserve System is the central banking system,which is responsibility for setting policy on monetary matters such as the management of interest rates and the quantity of money,also referred to as the money supply which can affect interest rates,inflation,and business cycles,all of which have a major impact on financial markets and institutions.So the managers of financial institutions care about the activities of the Federal Reserve System quite much.
3. Because the essence of adverse selection problem is the lender-savers are not quite aware of the product they would buy.In other words,I’m known my family member who is kind of reliability well than a stranger I know him or her nothing at all,so I reckon there will be a higher probability to take back my funds.So due to the asymmetric information between me and the stranger,I prefer to make a loan to my family member rather than a stranger.
4. (1)According to the formula
i=ir +πe...

...SCHOOL OF ACCOUNTING
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ASSIGNMENT COVER SHEET
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(Individual)
Student details:Please print clearly | SurnameMandela | Given Names Lavinia | Student ID No.16348123 |
Unit Name: | Accounting( Financial) modelling 330 |
Name of Tutor: | Victor Chandra M, Sc | Tutorial day and time: | Tuesday-Thursday |
Assignment Number and /or Name: | Folio 1-Financial analysis of Telstra corp |
Due Date: | Date submitted: |
| |
The assignment should meet the following requirements.
1. Assignment is submitted on A4 size paper and is neatly collated.
2. About details are fully completed and legible
3. Pages have been firmly stapled.
4. A copy has been retained by each student.
Plagiarism
Plagiarism occurs when the work of another person, or persons, is used and presented as one’s own, unless the source of each quotation or piece of borrowed material is acknowledged with an appropriate citation.
Encouraging or assisting to commit plagiarism is a form of improper collusion and may attract the same penalties. The University regards very seriously any acts of cheating, or dishonesty by way of plagiarism. There is a range of penalties which may be imposed on a student for academic dishonesty, ie plagiarism.
EXECUTIVE SUMMARY
Telstra Corp Limited is known as one of the biggest telecommunication...

...Financial Modeling Discipline – Guiding Principles
A good financial analyst has the discipline of adhering to a list of guiding principles to help ensure that the development of the financial model achieves the desired results.
By following these simple steps, a financial analyst should be able to build a financial model that is simple, accurate and most importantly consistent, to help build confidence in afinancial decision making process.
Financial Modeling Discipline can be acquired in all 3 stages of the financial modeling process:
• Specification Stage
• Design Stage
• Build Stage
Specification Stage
1. Be very clear on the effort involved and the dependencies before committing to deadlines - the financial modeling exercise is usually on the critical path!
2. Get the algebra right — make sure all revenues, cash flow inwards and assets are positive while expenses, cash outflows and liabilities are negative. This will ensure that we rarely use the minus sign in formulae and can use the sum() function.
3. Avoid all calculations that will cause circular references.
Design Stage
1. Ensure that each assumption is input only once in a financial model.
2. Define scenario variables clearly in a separate “Scenario manager” section or worksheet in the financial model.
3. Define the...

...Article 1:
Titre: Colorado Flooding Imperils Oil and Gas Sites, Causes Spill
Date: Septembre 19, 2013
Journal : National Geographic
Cet article parle de l’inondation à Colorado le 17 Septembre, 2013. Cette inondation était un grand désastre parce qu’il y avait un grand déversement de pétrole. Il y avait a peu près 5250 gallons de pétrole qui a infiltré la rivière South Platte dans la partie centre-nord de l’état. Le pétrole venait des réservoirs pétroliers Anadarko endommagés. Cette déversement est très mauvais pour l’environnement parce que si les animaux mangent cela, ils vont avoir des maladies et va mourir. Ceci va affecter l’écosystème de cet endroit parce que si une espèce meurt, la chaine alimentaire va être affectée. Alors, en conclusion, le déversement de pétrole va faire un grand impacte sur les écosystèmes de cet endroit. »
« In the wake of unprecedented massive flooding over thousands of square miles in Colorado, government officials and private companies are rushing to secure the region's heavy concentration of oil and natural gas wells, and prevent dangerous chemicals and toxic waste from contaminating the region's water. (See related quiz: "What You Don't Know About Oil Spills.")
Late Wednesday, reports emerged that at least 5,250 gallons of crude oil had seeped into the South Platte River in the north-central part of the state. The oil was leaking from damaged Anadarko Petroleum tanks. "Anadarko is responding and has absorbent booms in the...

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ANALYSIS
Physics has a lot of topics to cover. In the previous experiments, we discussed Forces, Kinematics, and Motions. In this experiment, the focus is all about Friction. Friction is the force resisting the relative motion of solid surfaces, fluid layers, and material elements sliding against each other. There are several types of friction like fluid friction which describes the friction between layers of a viscous fluid that are moving relative to each other; dry friction which resists relative lateral motion of two solid surfaces in contact and is subdivided into static friction between non-moving surfaces, and kinetic friction between moving surfaces; lubricated friction which is a case of fluid friction where a fluid separates two solid surfaces; skin friction which is a component of drag, the force resisting the motion of a fluid across the surface of a body; internal friction is the force resisting motion between the elements making up a solid material while it undergoes deformation and sliding friction.
When surfaces in contact move relative to each other, the friction between the two surfaces converts kinetic energy into heat. This property can have dramatic consequences, as illustrated by the use of friction created by rubbing pieces of wood together to start a fire. Kinetic energy is converted to heat whenever motion with friction occurs, for example when a viscous fluid is stirred. Another important consequence of many types of friction can be wear,...

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The case between Beauty and Stylish involves concept of a valid contract, pre-contractual statements, express term and misrepresentation.
A valid contract is established between Beauty and Stylish when an offer is accepted and there is intention for both parties to create legal relations. An offer refers to the expression of willingness of the offerer to be contractually bound by an agreement if his or her offer is properly accepted. It has to be clear and certain in terms. It must also be communicated to the offeree before it is being accepted. In addition, the acceptance has to be unqualified, unconditional and made by a positive act. In the case of Beauty and Stylish, a positive act refers to the signing of the contract. All terms of the offer must be accepted without any changes and cannot be subjected to any condition, taking effect only upon fulfillment of that condition. When Beauty and Stylish enter into the agreement, they must intend to bind and bound legally to each other by their agreement. This is the intention to create legal relations between two parties. In the meanwhile, this contract must possess consideration. A contract must therefore be a two-sided affair, with each side providing or promising to provide something of value in exchange for what the other is to provide.
Every contract, whether oral or written, contain terms. The terms of a contract set out the rights and duties of the parties. Terms are the promises and undertakings given by each...

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Coursework 2
Mathematical Finance
Group 27
Q1. Hedging in Complete and Incomplete market
Solution:
Complete market
Suppose we have m states. A complete market A is one with the marketed subspace Span(A.1,A.2, ⋯, A.n) includes all possible payoffs over the m states, i.e., if it contains all possible m-dimensional vectors.
Incomplete market
Suppose we have m states. An incomplete market corresponds to a market with fewer linear independent assets than states, i.e. Rank (A) < m.
Implications:
Complete market
Let A be payoff matrix and b the payoff we want to hedge.
1. For hedging in Complete Markets with no redundant assets, the perfect hedge is.
2. For hedging in Complete Markets with redundant assets, there can always be found m linear independent basis assets in A to form A1 such that A1 is invertible, and the perfect hedging portfolio for any focus asset b is given by.
3. For hedging in Complete Markets with no redundant assets, state price vector is. The focus asset price.
Incomplete market
1. For hedging in Incomplete Markets with no redundant assets, the best hedge is.
2. For hedging in Incomplete Markets with redundant assets, similar approach as in Complete Markets.
( Ales Cerny, Mathematical Techniques in Finance, 2009)...

...Year 11 Mathematics
FinancialMaths
Year 11 Mathematics
FinancialMaths
Fiona Pulea
Fiona Pulea
TASK 1: Finding your ideal car (Level 1) (KD1, 2, CD1, MD1)
Imagine you are an eighteen year old who has just finished school and would like to purchase your first car. Select the make and model of a second hand car which is less than six years old, that you would like to own. (Be reasonable!)
You can obtain car prices from a website such as:
* http://www.redbookasiapacific.com/au/
* http://carsguide.news.com.au/
* http://www.carprices.com/
Paste the image of the car including the price below. (*Every student must have a different car and there should be no prices which are exactly the same as any other student in the class. Check with Mr Mellor for approval before proceeding after choosing your car.)
$9,950.00
2010 Model
Hyundai i20
Odometer: 43,930
$9,950.00
2010 Model
Hyundai i20
Odometer: 43,930
$16,990.00
2012 Model
Holden Cruze
Odometer: 48,685
$16,990.00
2012 Model
Holden Cruze
Odometer: 48,685
$25,900.00
2010 Model
Toyota Hilux
Odometer: 80,614
$25,900.00
2010 Model
Toyota Hilux
Odometer: 80,614
1. Find out how much the car is likely to depreciate each year.
Car 1 – Hyundai i20:
Car 2 – Holden Cruze:
Car 3 – Toyota Hilux:
2. Contact an insurer (or research on internet) to find out how much car insurance would cost for an...