KNOWLEDGE AND UNDERSTANDING. The aim of this course is, first of all, to provide the basic elements of classical financial mathematics such as accumulation, discount, annuities, loans, ... . Then both theoretical and practical tools for the valuation of financial instruments, in particular bonds, are provided within the usual framework of perfectly competitive markets, free of arbitrage opportunities. The student will acquire an adequate knowledge of tools and techniques for quantitative support to economic decisions, particularly in the financial field.

APPLYING KNOWLEDGE AND UNDERSTANDING. The student will be able to formulate in quantitative terms the main decision-making issues involving the use of basic financial instruments.

MAKING JUDGEMENTS. The student must deeply understand the concepts presented during the course, and be able to apply them to situations other than those illustrated.

COMMUNICATION SKILLS. The student should be able to communicate effectively the concepts learned during the course.

LEARNING SKILLS. The student should be able to develop learning skills which are essential to the understanding of more advanced issues.

Basic knowledge of calculus and linear algebra is required. The contents of this course will be necessary both for actuarial mathematics and for more advanced financial mathematics courses such as, eg, mathematical finance.

In the first part of the course the classical theory of compound interest is developed. In the second part the "term structure of interest rates" and the concept of "duration" are defined in the framework of the financial markets. Finally, in the third part the fundamental results of the classical semi-deterministic immunization theory are supplied.

Luciano Daboni, Claudio de Ferra, "Elementi di matematica finanziaria", Edizioni LINT, 1977.

Giacomo Scandolo, "Matematica finanziaria", AMON, 2013.

Gilberto Castellani, Massimo De Felice, Franco Moriconi, "Manuale di finanza: I. Tassi d'interesse. Mutui e obbligazioni", il Mulino, 2005.

Massimo de Felice, Franco Moriconi, "La teoria dell'"immunizzazione finanziaria", il Mulino, 1991.

Other technical support is available trough Moodle.

In the first part of the course the classical theory of compound interest is developed. In the second part the "term structure of interest rates" and the concept of "duration" are defined in the framework of the financial markets. Finally, in the third part the fundamental results of the classical semi-deterministic immunization theory are supplied.

The course is taught in traditional mode, through classroom lectures and examples of application.

Additional teaching materials (notes and exercises) will be made available on the course website (Moodle 2).

The results will be verified by means of both a written and an oral examination, aimed at ensuring knowledge of the topics listed in the program and the ability to apply theory and methods to problem solving.

This course explores topics closely related to one or more goals of the United Nations 2030 Agenda for Sustainable Development (SDGs)