Cleveland State University
MTH 491/591 Financial Mathematics, Spring 2015
3 Credit Hours for MTH 491; 4 Credit Hours for MTH 591
Face to Face meeting: MW: 4:00pm-5:50pm (RT1516)
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Instructor: Dr. Sally Shao (http://academic.csuohio.edu/shao_s/)
Office: RT 1527; Phone: (216) 523-7150
E-mail: s.shao@csuohio.edu
Course URL: https://bblearn.csuohio.edu/MACAuth/login.jsp
Office hours: MW 10:35am-11:35am (at RT 1527), 2:45pm-3:15pm, OR by appointment
Texts and DVDs: The materials of the following texts, and DVDs clips are available download from
your blackboard account:
 (1) The Actex Study Manual for the SOA Exam FM and CAS Exam 2, (2014 Ed, or 2013 Ed.)
 (2) The Study Notes of Chapter 1-9 of Financial Mathematics for Actuaries by Wai-Sum Chan, YiuKuen Tse, McGraw Hill, 2011
 (3) Lecture Notes and Examples (S. Shao)
 (4) DVDs: (a) The Actex DVD for Exam FM/2; (b) Time Value and the TI Financial Calculator.
COURSE OUTLINE
Financial Mathematics skills are transferable to any industry or job that requires financial or risk modeling
and management. This includes the development of software applications to conduct financial analyses in
management and HR consulting for risk management, the development of pension plans, and working with
government institutions such as Social Security, Department of Labor or Medicare to manage social
programs. The goal of this Financial Mathematics course is to provide an understanding of the fundamental
concepts and procedures of financial mathematics at the both undergraduate and graduate level, and how
those concepts are applied in modern financial analysis and financial economics.
The course will cover the material required by the Casualty Actuarial Society (CAS) or Society of Actuaries
(SOA) for their SOA Exam FM/CAS Exam 2. The students can use this course to prepare for the professional
exam. However, you DON”T have to take the professional exam in order to take this course, and you DON'T
need to take Exam P/Exam 1 to take Exam FM/Exam 2.
This course is offered online in a blended format. It will be 1/4 online and 3/4 face to face meetings
(twice a week).
• The course content will be delivered via the Blackboard learn system
(https://bblearn.csuohio.edu/MACAuth/login.jsp). It includes e-books, study guides, lecture notes, DVD
clips and YouTube video clips for each topic, problem sets and their solutions, and seminars. The instructor
will communicate with students via a variety of interactive tools including discussions, announcements,
emails, online chats and face-to-face meetings. The face-to-face meetings will be twice a week.
• We will have seminar series (about 3-4 seminars on the class time, either Monday or Wednesday). The
speaker(s) are from the actuarial industry, or they had been worked in the industry as well as your fellow
students who passed the Exam FM/Exam 2. The goal is to provide his/her experiences related to the actuary
exams, and what the insurance/consultant companies are expected from an actuary.
There are TI BA II Plus Professional calculators to be available for students to borrow during the
semester. You need to learn this calculator from the TI Financial Calculator instructional DVD.
Course Outlines:
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elearning (DVDs): ACTEX Exam FM/2 Seminar DVDs
Module 1: Interest rates and time value of money
Module 2: Annuities
Module 3: Loan repayment
Module 4: Bonds
Module 5: Yield rates of an investment
Module 6: Term structure of interest rates
Module 7: Liability management, duration and immunization
Module 8: Derivative securities, forwards, futures, options, manage risk, swaps (Ch8-Ch16)
For additional information, please check the syllabus of SOA Exam FM/CAS Exam 2
https://www.soa.org/education/exam-req/edu-exam-fm-detail.aspx
GRADING POLICY
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There will be weekly problem sets, THREE tests and one optional make-up test. Students
taking the course at the graduate level must take the graduate-version Test 3 and do a final
project (5-10 pages) (in other words, final project is not required for the students who take this
course at the undergraduate level). The questions in the problem sets and tests are ALL
computer-based online multiple choices. The students are allowed to have multiple tries (up to 2
tries) for the problem sets and the three tests.
You need to obtain 40% more in the Test 3 (Final), otherwise, your course grade will be F. The final
letter grade will be attributed as follows according to the entry Course Score in blackboard:
Weight for Undergraduate Students:
Problem sets [PS#]:
900pts (60%)
Tests [T1, T2]:
300pts (20%)
Test 3 [T3]:
300pts (20%)
Grading Scale for Undergraduate Students:
1,380pts or better (92% or better)
A
1,379-1,290pts (91.9%-86%)
A1,289-1230pts (85.9%-82%)
B+
1,229-1,185pts (81.9%-79%)
B
1,184-1,125pts (78.9%-75%)
B1,124-1,080pts (74.9%-72%)
C+
1,079-975pts (71.9%-65%)
C
974-750pts (64.9%-60%)
749-0pts (below 59%)
D
F
Weight for Graduate Students:
Problem sets [PS#]
900pts (56%)
Tests [T1, T3]
300pts (18.75%)
[T3]:200pts (12.625%)
Test 3 [T3] and Final Project [P]
[P]: 200pts (12.625%)
Grading Scales for Graduate Students:
1,472pts or better (92% or better)
A
1,471-1,376pts (91.9%-86%)
A1,375-1,296pts (85.9%-81%)
B+
1,295-1,200pts (80.9%-75%)
B
1,199-1,120pts (74.9%-70%)
B1,119-1,040pts (69.9%-65%)
C
1,039-0pts (below 65%)
F
Weekly Problem Sets, Tests, Discussions, Seminars and the Final Projects:
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Weekly Problem Sets:
Weekly Problem Sets will be available in the Assessment Section of your blackboard learn system
account for at least TWO Weeks. They will be grouped into the individual learning modules listed
in the home page of the course account, with the related the topics of study, lecture examples, a
chapter of study guide and the DVD sections. You are expected to study the materials, watch the
DVD presentations and related materials and be doing them weekly as we go along. Each problem
set has about 10 -15 computer based online multiple choice questions; each question is 5-10pts.
Most of the problems are challenging and they are similar those in the Exam FM/Exam 2. You are
allowed to have up to 2 attempts to the online multiple choice questions. The solutions will be
released after each deadline.
Tests and Final Projects:
Each test will be online multiple choice questions similar to the Exam FM/Exam 2. Each Test 1 and
Test 2 is worth 150 points. Test 3 is worth 300pts for the undergraduate students which they will
take the early final (lectures are ended for undergraduates on April 23, 2015). You are allowed to
have up to 2 attempts in each Test 1, 2 and 3. Students taking the course at the graduate level
must take the graduate-version Test 3 (200 points) and do a final project (5-10 pages) of 200
points in the area of interest rate theory, or mathematical derivatives. Detailed guidelines of the
final project will be given in late March. You also can take an optional make-up test to replace the
lowest grade of the Problem Sets or the lowest test grade.
Problem Set Discussions:
During our face meetings each week, we will use around 60~90 minutes for the discussion of the
problem sets in class. We also have some time for you to work online on the blackboard system. You
can always ask questions during the face to face meetings.
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Career Seminars:
The purpose of the seminars is to provide information, by the speakers who had worked in actuarial
industry, about how to take the professional exams, what kind of knowledge is really useful, how to
get internships, what is like working in the actuarial industry, and many more. You can ask questions
during the seminars. You are required to attend the seminar in person. Extra credits will be
given for attending the career seminars. There are about 3-4 seminars to be scheduled for this
semester.
Course Website:
By login your Blackboard Learn System account at https://bblearn.csuohio.edu/MACAuth/login.jsp
You can watch DVDs, YouTube video clips; download e-books, study guides, lecture examples,
handouts, solutions and Exam FM/Exam 2 information and materials; work on weekly problem sets,
take the tests and practice Exam FM/Exam 2 (13 practice tests are available online for you to
practice).
Make-ups and Extra credits for attendance
If you can provide a proof for emergence events, or notification (of a compelling reason) is made
IN ADVANCE, some special arrangement can be made for you to take the test or problem set
after the deadline.
 There will be 20pts extra credit for a student who DOES NOT miss class more than TWO
times during the entire semester.
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Please note that a blended online course is not an easy course, you need to study mostly by
yourself and work extremely hard on the exam problems.
Disabilities Statement
Students with disabilities which may affect their ability to complete course requirements in this class
may request appropriate accommodations by registering with the Office of Disability Services at
(216) 687-2015 in Main Classroom 147 and discussing the nature of their situation
(http://www.csuohio.edu/offices/disability).
SOA Online Sample Exams
https://www.soa.org/Education/Exam-Req/Syllabus-Study-Materials/edu-exam-p-onlinesample.aspx
Tentative Schedule for Problem Sets and Tests:
TI Financial Calculator instructional DVD (Part I)
PS1 (Interest theory and time value of money) due
PS2 (Annuities) due
T1
PS3 (Loan repayment) due
PS4 (Bonds) due
PS5 (Yield rates of an investment) due
T2
PS6 (Term structure of interest rates) due
PS7(Asset Liability Management, duration and
immunization) due
PS8 ( Derivative securities) due
Make-up test (optional)
Jan 19, 2015 (Monday). Extra Credit 20pts
Jan 25 , 2015 (Sunday)
Feb 8, 2015 (Sunday)
Feb 12-15, 2015 (Thursday -Sunday)
Feb 26, 2015 (Thursday)
Mar 8, 2015 (Sunday)
Note: 3/8-3/15 is 2015 Spring Break
Mar 22 , 2015 (Monday)
Mar 26-29, 2015 (Thursday -Sunday)
Apr 5, 2015 (Sunday)
Apr 12, 2015 (Sunday)
May 1, 2015 (Friday)
Apr 24-27, 2015 (Friday-Monday)
For Undergraduate students:
Apr 27 (Mon)-May 4, 2015 (Mon) (8 days)
T3
For Graduate Students:
Apr 29 (Wed)-May 5, 2015 (Tue) (6 days)
Final project report (Graduate students only) due by 12:00 noon, Tuesday , May 5, 2015