ACT 240H1F, Fall 2007 Mathematics of Investment and Credit
Lecture Section
Lecture times, location
Instructor
Instructor’s office hours
TA office hours
Tutorial sections by first letter of your family
name
TA’ emails
TentativeTopicCoverage
Effective rates, PV and equation of value
Nominal rates, discount, Force interest, Real
rates
Level payment annuities
Generalizations
TERM TEST 1
L0101 Mondays, Fridays
M 10-12, From Sep 10 in LM159
F 10 (tutorial), From Sep 21
Dr. Andrei Badescu
Office: SS3105
416-946-7582
badescu@utstat.utoronto.ca
Webpage: http://fisher.utstat.toronto.edu/badescu/
M 13:00 – 16:00
In Sidney Smith 2133
Mimi Chong –Fr 3-5 pm
David Januszewski Tu 2-3 pm
Jiang Yu Liu – Th 12-1
Lizhen Xu – Fr 11-1
F 10:00 – 11:00 Starts Sep 21
A-H: SS2105 Mimi Chong
I-L: SS2111 David Januszewski
M-S: SS1070 Jiang Yu Liu
T-Z: SS1072 Lizhen Xu
mimi.chong@.utoronto.ca
david@utstat.utoronto.ca
bill.liu@utstat.utoronto.ca
lizhen@utstat.utoronto.ca
Tentative Schedule
Sep 10 (No Sep 14 tutorial)
Sep 17
Text
1-1.1
1.2
1.3-1.6
Sep 24
Oct 1
2-2.1
2.2, 2.3
Oct 8 Thanksgiving holiday
Oct 12 10:00 a.m.
Non-constant payments
Amortization of loan
Level payments
Mortgages
Sinking funds
TERM TEST 2
Oct 15
3-3.1
Oct 22
Oct 29
Nov 5
Nov 9 10:00 a.m.
3.2
3.2
3.3
Bond prices & amortization
Callable bonds
Internal rate of return
Dollar & time-wtd yields, Portfolio &
investment-year,
Continuous payments
Nov 12
Nov 19
4-4.2
4.3.1, 5.1
Nov 26
5.2
5.3.1
5.3.3
Dec 3
ACT 240 Fall 2007 (Continued)
Texts
Mathematics of Investment and Credit, 3rd. Ed., Samuel A Broverman, ACTEX Publications, 2004, plus Solutions
Manual, both available in U of T Bookstore, plus Prof Broverman’s Fall 2007 manual for Exam FM, available to ACT
240 students for the cost of printing: Act Sci Club, 6th Floor SS6007. You are requested to bring the text and manual to
each class – without it you will often be lost.
Course Objective:
This course is designed to help prepare you for exam FM of the Society of Actuaries (same texts) and for future
university courses. You are expected to read and understand the descriptive portions of the text yourself. Questions and
in-class discussions are encouraged.
Marking Scheme:
The final course mark will be determined via 2 in-class term tests, each worth 25% and a 2 hour final exam worth 50%.
The tests and final exam will be entirely in multiple choice format. At least half of the marks on the tests and final
exam will be from a portion of a large set of questions indicated to you in advance, with small changes such as to the
interest rate.
Do I Have to Write at Supersonic Speed to take Notes in Lecture
No. Anything which is printed or typewritten or photographed and anything which is from the Wall Street Journal or
Yahoo Finance etc. is guaranteed to be put onto the course web site, probably within 24 hours of the end of the lecture.
The lectures will often be structured around extracts from the FM study manual by Prof Sam Broverman. The text is
expected to be covered in the above order, though the timing may deviate from the day-to-day schedule above.
Missed Term tests:
Please do not take this course if you plan to be sick for the obligatory term tests. There will be no make-up tests.
Should you miss a term test, you are required by faculty regulation to submit, within one week, appropriate
documentation to the course instructor or the Departmental office: SS6018. Print on the documentation your name,
student #, the course number and the date. We are skeptical about accepting medical certificates unless the doctor
specifically indicates that in his/her opinion there was a disabling health problem on the day of the test. If your
documentation is accepted, the test’s weight will be shifted such that your final mark will consist of a 1/3 weighting on
the other term test and a 2/3 weighting on the final exam. If documentation is not provided or is not accepted, your test
mark for the missed test will be zero.
Extract from SoA Exam FM Syllabus
Knowledge and understanding of financial mathematics concepts are significantly enhanced through working out
problems based on those concepts. Thus in preparing for the Financial Mathematics examination, whichever of the
source of textbooks students choose to use, students are encouraged to work out the textbook exercises related to the
listed readings.
Calculator
A calculator is essential for working exercises, tests and final exam. The Texas Instruments BA II PLUS calculator is
one of the calculators allowed on the Society of Actuaries examinations; it has the financial functions that would be
needed for this course, and is recommended. The TI BA35 can also be used on ACT240 and for SoA Exam M. It is
necessary for ACT240 that your calculator be able to solve for the interest rate i in calculations such as 10(1+i) 4 +
20(1+i)3 +30(1+i)= 160. ONLY the non-programmable calculators are allowed.
Continuation in ACT
There are rules regarding the minimum mark needed in ACT240, ACT245 and ACT247. It’s important to visit the actsci webpage for details (www.utstat.toronto.edu , take the actuarial program link).
Emails
As a new policy rule at University of Toronto, I will only answer back emails coming from the university accounts.
THE DEADLINE FOR STUDENTS WHO WANT TO MOVE TO ACT230 IS ON THE 5TH of October 2007!!!
If you want to receive information about jobs, presentations etc. related to the actuarial field, please subscribe to
the ACT SCI club by sending a blank email at the following address: uoftactsci-
subscribe@yahoogroups.com. ONLY IF you do not receive any response to your blank email, please
write directly to the ACT SCI club address at uoftactsci@yahoo.ca.