Economics and Finance

Financial transactions. The capital market. The structure of prices and interest rates in the capital market. Laws and financial regimes. Equivalent rates. nominal rates. Yield to maturity. made financial transactions. present value of an annuity and upright. Classification of an annuity. current and uprights in different financial regimes values. Problems with constant annuities: the present value search, the installment, the number of installments, the interest rate. temporal indices and variability. Establishment of a capital. general transaction scheme. Typical problems in capital formation. Amortization of loans. The elementary and the financial setting. Depreciation methods. Usufruct and bare ownership. Evaluation and selection of financial projects. R.E.A. criterion, the T.I.R. and T.R.M. Term structure of interest rates, financial immunization principles.

Having passed the general mathematics exam having the knowledge of the basic concepts of the study of function, derivatives and integrals

Libro di testo: P. De Angelis, R. De Marchis. M.Marino; A.Martire - Lezioni di Matematica Finanziaria - Giappichelli EDITORE

Frontal lesson with use of blackboard, transparencies and personal computer

Attendance is recommended for passing the exam but it is not mandatory

The written test consists of three exercises and a theoretical / practical question. The time for the written test is 60 minutes The oral exam focuses on the whole program

Frontal lesson with use of blackboard, transparencies and personal computer

The syllabus for the first part of the course (3 CFU) is defined as follows: o Introduction to financial transactions. Financial situations and preference criteria, financial transactions. o Intertemporal financial laws. Capitalization and discounting, simple interest regime, commercial discount regime, compound interest regime, interest rates, nominal interest rate, complementary notions on capitalization, capitalization laws as solutions of first-order differential equations, mixed capitalization and comparison of accumulated values. o Annuities. Value of a financial transaction under compound regime, general aspects of annuities, fundamental formulas of geometric series, present value and accumulated value of an annuity, case of fractional annuities, case of perpetuities, problems related to annuities, determination of duration, determination of the payment, determination of the rate. o Amortization. Fundamental quantities and relations of amortization, types of amortization: uniform or Italian method, progressive amortization with constant installments or French method, amortization with accumulation quotas or American method. o Choice among certain financial transactions. Comparison between certain financial transactions, the NPV criterion and the IRR criterion. o The term structure of interest rates. Theory of financial equivalence in the market, bonds, spot and forward contracts, term structure and its measurement. o Principles of financial immunization. Duration and convexity.

There are no compulsory prerequisites for the course, but it is crucial that students have a basic knowledge of mathematics. Therefore, it is required that students have passed the basic mathematics course exam and are able to manipulate mathematical functions, derivatives and integrals.

Reference book: P. De Angelis, R. De Marchis, M. Marino, A.L. Martire (2023) Lezioni di Matematica Finanziaria, Geppichelli Editore. Further books (not mandatory): M. Frezza (2019) Esercizi di Matematica Finanziaria. Svolti e commentati, McGraw-Hill Education G. Castellani, M. De Felice, F. Moriconi (2005) Manuale di Finanza. I Tassi d'interesse. Mutui e obbligazioni, Il Mulino

The lectures are delivered in person: the lecturer teaches in the Faculty classrooms, using the IT equipment available, and students are required to attend in person. Teaching materials are made available to students in a dedicated Classroom.

The assessment procedure is based on a written test with open-ended questions and\or exercises. In particular, the exam will consist of three questions related to some topics covered during the lectures. In case of open-ended questions, students will be required to provide an exhaustive answer, attempting to contextualize both the techniques and the modelling used. As for the exercises, students are required to show the whole mathematical procedure that leads to the final result, also providing appropriate comments.

- G. Castellani, M. De Felice, F. Moriconi (2005) Manuale di Finanza. I Tassi d'interesse. Mutui e obbligazioni, Il Mulino - P. De Angelis, R. De Marchis, M. Marino, A.L. Martire (2023) Lezioni di Matematica Finanziaria, Geppichelli Editore. - M. Frezza (2019) Esercizi di Matematica Finanziaria. Svolti e commentati, McGraw-Hill Education

The course is delivered through in-person lectures, complemented by guided discussions, practical exercises, and occasional seminars led by industry experts, with the aim of deepening specialized knowledge and fostering engagement with real-world applications.