Math 473: Financial Mathematics
Meets:
Tuesday and Thursday from Noon to 1:15 in REC 307
Instructor:
Office:
E-mail:
Web
Jeff Beckley
818 Mathematics Building Phone: 49—40493 or 317-698-8543
jeffbeckley@indy.rr.com
http://www.math.purdue.edu/~jbeckley/
Office Hours:
Tuesday
3:00 – 4:30
Thursday
3:00 – 4:30
or by appointment
General Information
The course will cover the learning objectives remaining for the Society of Actuaries Examination
MLC and as much of Examination MFE as possible.
Textbook:
Actuarial Mathematics, Second Edition
Bowers, Gerber, Hickman, Jones and Nesbitt
Derivative Markets, Second Edition
By Robert L. McDonald
Published by Addison Wesley, ISBN 0-321-28030-X
For Derivative Markets, the paperback version is less expensive.
Some students in the past have purchased the “international” version
because it has been less expensive. It appears to be the same as the
non-international version.
Calculators
The only calculators permitted for this class will be those permitted to be used on the Society of
Actuaries examinations in the Spring of 2010. The Society of Actuaries website states:
“Candidates may ONLY use the battery or solar–powered Texas Instruments BA–35
model calculator, the BA II Plus*, the BA II Plus Professional*, the TI–30Xa or
TI–30X II* (IIS solar or IIB battery), or TI-30X MultiView (XS Solar or XB
Battery). Candidates may use more than one of the approved calculators during an
examination.” The best one for this class is the Texas Instruments BAII Plus or Texas
Instruments BAII Plus Professional. For the purpose of this class, it will be assumed that you
have this calculator.
The class website has instructions from the Society of Actuaries website for either calculator that
you choose.
The student is expected to learn the functionality of the calculator as part of the preparation for
class exams and the Exam FM/Exam 2. Some of the calculator functionality will be covered in
class. Please bring your calculator to each class.
Procedures
Evaluation will be based on a combination of tests, quizzes, and homework assignments.
There will be 9 quizzes during the semester. Quizzes will be announced. The lowest quiz grade
will be disregarded.
There will be 2 tests and a final. The final will NOT be comprehensive. The tests will be in the
evening.
All tests and quizzes will be closed book and closed notes. Calculators are allowed. Quizzes
cannot be made up under any circumstances. There will be no makeup exams except in extreme
circumstances and then only with a prior arrangement with the instructor.
Final grades will be based on the following weights:
Quizzes
Homework
Test 1
Test 2
Final
Total
16%
9%
25%
25%
25%
100%
Homework: Homework is due at the beginning of class. Doing the homework is essential to
understanding the material. No homework will be accepted past the due date, but your lowest two
homework scores will be dropped.
For homework, quizzes, and tests, answers are expected to include all the work necessary to do the
problems.
Academic Adjustments
Students who have been certified by the Office of the Dean of Students -- Adaptive Programs as
eligible for academic adjustments should go to MATH 242 and request an Information Sheet for
this semester that explains how to proceed this semester to get these adjustments made in
Mathematics courses. (Procedures are not the same as last semester.) This should be done during
the first week of classes. Only students who have been certified by the ODOS-Adaptive Programs
and who have requested ODOS to send their certification letters to their instructors are eligible for
academic adjustments.
Students who are currently undergoing an evaluation process to determine whether they are eligible
for academic adjustments, are encouraged to find out now what procedures they will have to follow
when they are certified, by requesting the above mentioned Information Sheet from MATH 242.
Large print copies of the Information Sheet are available from MATH 242 upon request.
Course Outline
Updated on April 20, 2010
While this outline tries to be complete and accurate, there will be changes in the schedule of the
course; these will be announced in class and on the class website. The reading is to be done by the
date listed and the homework is to be turned in on the date listed.
The Homework for the class will consist of the problems from the or problems that I will hand out.
The homework handed out will also be posted on the class website.
Day
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Tu
Th
Finals
Date
1/12
1/14
1/19
1/21
1/26
1/28
2/2
2/4
2/9
2/11
2/16
2/18
2/23
2/25
3/2
3/4
3/9
3/11
3/16
3/18
3/23
3/25
3/30
4/1
4/6
4/8
4/13
4/15
4/20
4/22
4/27
4/29
??
Reading
Chapter 10
Chapter 10, Chapter 11
Chapter 15
Chapter 15
Multi-State Transition Models
Poisson Processes
Poisson Processes
Chapter 9
Chapter 9
Test 1 – Life Con Material
Chapter 10
NO CLASS
Chapter 10
Chapter 11 and Chapter 12.1
Chapter 12
Chapter 12
Chapter 13
Chapter 13
NO CLASS
NO CLASS
Chapter 14
Chapter 14
Chapter 18
Test 2
Chapter 18 &19
Chapter19
Chapter 20
Chapter 20
Chapter 20
Chapter 20
Chapter 22
Chapter 23
Final Exam
Class Homework
1. i.-x
1. xi, xii, 2-10
11, 12, 13. i., 14. i.
13. ii.-vii., 14. ii., 15-17
18, 19, 22
20, 21, 23 i.-vi.
23 vii – ix, 24-27, 29
28, 31-35
36-44
45-46
47-48
49-56
57-59,60 i-ii, 61 i-ii
60 iii-vi,61 iii-x,62,63
64 i-x
64 xi-xii, 65-69
70, 71, 72 i. and ii.
72. iii – 77 vi.
77. vii – viii, and 78 i-vi
78 vii-viii, 79
80-85
86
87-88
89-92