MATH-UA.250 Mathematics of Finance Homework 1 Prof. Petter Kolm Due: February 18, 2025 Instruction This homework is to be done individually. No collaboration and/or sharing permitted. For some problems you may find it helpful to use Excel / Google Sheets. For those, please turn in one spreadsheet only, separating calculations for different problems on separate tabs. Your spreadsheet should be turned in as an .xlsx file. The late homework policy is described on the course syllabus. Objective In this assignment, you will familiarize yourself with the following concepts from the lectures: • interest rates, discounting, and day count conventions, • bond pricing and bond math, and • level-pay loans. Questions Solve the following problems in Chapter 2 of the text book: • Exercises 1-5, 7-9, 12-16, 18, 20 Each part of a question counts as one point. For example, Exercise 3 counts as two points (one for (a), and one for (b)), while Exercise 4 counts as six points (one for each of (a)-(f), respectively). 1
