Financial Math for Actuaries: From Loans to Bonds to Immunization from edX

In preparation for SOA Exam FM / CAS Exam 2, the Financial Math for Actuaries: From Loans to Bonds to Immunization course will give you opportunities to better understand the time value of money through these learning activities:

Performing calculations related to loan payments, loan balances, loan amortization tables and loan refinancing
Calculating the price of bonds with various features, developing bond amortization tables and effective yield rates
Calculating the net present value of cash flows, and developing internal rates of return
Studying the term structure of interest rates, and calculating the duration/convexity of assets whose value is sensitive to interest rates

What you'll learn

Those enrolled in Financial Math for Actuaries: From Loans to Bonds to Immunization will learn how to:

Calculate loan payments based on the loan term and interest rate
Calculate the outstanding balance of a loan by the prospective or the retrospective method
Create an amortization table that breaks down loan payments into principal and interest, and showing the outstanding loan balance
Calculate new loan payments for a refinanced loan
Calculate the price of a bond including any call features
Develop an amortization table for a bond
Define and calculate the NPV and IRR of a project
To define and calculate the duration and convexity of an asset
To define spot / forward rates and determine the present and accumulated values of cash flows using spot / forward rates

What's inside

Learning objectives

Calculate loan payments based on the loan term and interest rate
Calculate the outstanding balance of a loan by the prospective or the retrospective method
Create an amortization table that breaks down loan payments into principal and interest, and showing the outstanding loan balance
Calculate new loan payments for a refinanced loan
Calculate the price of a bond including any call features

Develop an amortization table for a bond
Define and calculate the npv and irr of a project
To define and calculate the duration and convexity of an asset
To define spot / forward rates and determine the present and accumulated values of cash flows using spot / forward rates

Calculate loan payments based on the loan term and interest rate
Calculate the outstanding balance of a loan by the prospective or the retrospective method
Create an amortization table that breaks down loan payments into principal and interest, and showing the outstanding loan balance
Calculate new loan payments for a refinanced loan
Calculate the price of a bond including any call features
Develop an amortization table for a bond
Define and calculate the npv and irr of a project
To define and calculate the duration and convexity of an asset
To define spot / forward rates and determine the present and accumulated values of cash flows using spot / forward rates

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Covers concepts and techniques fundamental to a career as an actuary, meeting the objectives of Exam FM / CAS Exam 2

Builds a foundation for understanding the time value of money, applicable in various financial domains

Offers practical examples and exercises in loan calculations, bond pricing, and other financial models

Provides insights into the term structure of interest rates and its implications for asset valuation

Taught by Gordon Enderle, an established instructor in financial mathematics

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Financial Math for Actuaries: From Loans to Bonds to Immunization with these activities:

Review 'The Mathematics of Finance' by Wilmott

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Provides a comprehensive overview of the mathematical concepts underlying financial markets.

View The Mathematics of Finance for High Schoolers on Amazon

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Read the book and take notes on key concepts.
Work through the practice problems.
Apply the concepts to real-world financial problems.

Follow online tutorials on financial modeling

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Introduces you to financial modeling tools and techniques.

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Identify online tutorials that cover financial modeling concepts.
Follow the tutorials and complete the exercises.
Apply the techniques learned in the tutorials to your own projects.

Compile and review course materials

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Ensures that you have a comprehensive understanding of the course materials.

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Gather all of the course materials, such as lecture notes, readings, and assignments.
Organize the materials in a logical way.
Review the materials regularly to reinforce your understanding.

Four other activities

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Refactor and optimize loan amortization code

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Provides an opportunity to strengthen your coding and financial engineering skills.

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Review the basics of loan amortization calculations.
Implement a loan amortization calculator in your preferred programming language.
Refactor the code to improve efficiency and readability.
Optimize the code for performance.

Solve practice problems from SOA Exam FM / CAS Exam 2

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Provides an opportunity to test your understanding of the core concepts and practice solving exam-style problems.

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Gather practice problems from textbooks, online resources, or official exam materials.
Attempt to solve the problems on your own.
Review your solutions and identify areas where you need improvement.

Develop a bond pricing model

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Allows you to apply the theories learned in class to a practical problem.

Browse courses on Bond Pricing

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Research different bond pricing models.
Select a model and gather the necessary data.
Implement the model in a spreadsheet or programming software.
Test the model using historical data.

Participate in a financial modeling competition

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Provides an opportunity to test your skills against other students and gain valuable feedback.

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Research different financial modeling competitions.
Select a competition and register.
Develop a financial model for the competition.
Submit your model and present your findings.

Career center

Learners who complete Financial Math for Actuaries: From Loans to Bonds to Immunization will develop knowledge and skills that may be useful to these careers:

Actuary

Actuaries make use of financial mathematics to calculate risks and determine the probability of future financial events. The Financial Math for Actuaries course can provide the specific mathematical foundation that actuaries need for this type of work. This course can help build a foundation in time value of money, loan amortization, bond pricing, and the term structure of interest rates.

See salaries and explore the career path for Actuary

Financial Analyst

Financial analysts use financial mathematics to perform several tasks such as forecasting, budgeting, and capital budgeting. The Financial Math for Actuaries course can provide the specific mathematical foundation that financial analysts need for these types of work. This course can help build a foundation in discounted cash flow, risk and return, yield curve analysis, and portfolio management.

See salaries and explore the career path for Financial Analyst

Investment Banker

Investment bankers use financial mathematics to value companies, structure financial transactions, and advise clients on mergers and acquisitions. The Financial Math for Actuaries course can provide the specific mathematical foundation that investment bankers need for these types of work. This course can help build a foundation in discounted cash flow, risk and return, yield curve analysis, and portfolio management.

See salaries and explore the career path for Investment Banker

Portfolio Manager

Portfolio managers use financial mathematics to manage investment portfolios and achieve investment objectives. The Financial Math for Actuaries course can provide the specific mathematical foundation that portfolio managers need for this type of work. This course can help build a foundation in discounted cash flow, risk and return, yield curve analysis, and portfolio management.

See salaries and explore the career path for Portfolio Manager

Risk Manager

Risk managers use financial mathematics to identify, assess, and manage financial risks. The Financial Math for Actuaries course can provide the specific mathematical foundation that risk managers need for this type of work. This course can help build a foundation in discounted cash flow, risk and return, yield curve analysis, and portfolio management.

See salaries and explore the career path for Risk Manager

Quantitative Analyst

Quantitative analysts use financial mathematics to develop and implement quantitative models to support investment decisions. The Financial Math for Actuaries course can provide the specific mathematical foundation that quantitative analysts need for this type of work. This course can help build a foundation in discounted cash flow, risk and return, yield curve analysis, and portfolio management.

See salaries and explore the career path for Quantitative Analyst

Loan Officer

Loan officers use financial mathematics to evaluate loan applications and determine creditworthiness. The Financial Math for Actuaries course can provide the specific mathematical foundation that loan officers need for this type of work. This course can help build a foundation in loan amortization, credit analysis, and risk assessment.

See salaries and explore the career path for Loan Officer

Mortgage Banker

Mortgage bankers use financial mathematics to originate and service mortgage loans. The Financial Math for Actuaries course can provide the specific mathematical foundation that mortgage bankers need for this type of work. This course can help build a foundation in loan amortization, credit analysis, and mortgage underwriting.

See salaries and explore the career path for Mortgage Banker

Financial Planner

Financial planners use financial mathematics to help clients achieve their financial goals. The Financial Math for Actuaries course can provide the specific mathematical foundation that financial planners need for this type of work. This course can help build a foundation in financial planning, retirement planning, and investment management.

See salaries and explore the career path for Financial Planner

Investment Advisor

Investment advisors use financial mathematics to provide investment advice to clients. The Financial Math for Actuaries course can provide the specific mathematical foundation that investment advisors need for this type of work. This course can help build a foundation in investment analysis, portfolio management, and financial planning.

See salaries and explore the career path for Investment Advisor

Credit Analyst

Credit analysts use financial mathematics to assess the creditworthiness of borrowers. The Financial Math for Actuaries course can provide the specific mathematical foundation that credit analysts need for this type of work. This course can help build a foundation in financial analysis, credit analysis, and risk assessment.

See salaries and explore the career path for Credit Analyst

Data Analyst

Data analysts use financial mathematics to analyze data and extract insights. The Financial Math for Actuaries course may be useful in providing the mathematical foundation that data analysts need for this type of work. This course can help build a foundation in financial data analysis.

See salaries and explore the career path for Data Analyst

Risk Analyst

Risk analysts use financial mathematics to identify and assess risks. The Financial Math for Actuaries course may be useful in providing the mathematical foundation that risk analysts need for this type of work. This course can help build a foundation in financial risk management.

See salaries and explore the career path for Risk Analyst

Business Analyst

Business analysts use financial mathematics to analyze business problems and identify solutions. The Financial Math for Actuaries course may be useful in providing the mathematical foundation that business analysts need for this type of work. This course can help build a foundation in financial modeling and analysis.

See salaries and explore the career path for Business Analyst

Consultant

Consultants use financial mathematics to help clients solve business problems. The Financial Math for Actuaries course may be useful in providing the mathematical foundation that consultants need for this type of work. This course can help build a foundation in financial modeling and analysis.

See salaries and explore the career path for Consultant