Math 4050

MATH 4050 - Financial Mathematics

This is an introductory course on financial mathematics primarily serving students with an applied mathematics, economics and finance major or an actuarial science minor. It illustrates how the concepts from calculus, and probability can help in establishing models to study interest theory, portfolio management and option pricing problems. This course will also benefit students from other disciplines in learning how to use methods in mathematics to study real world problems.

Prerequisites & Corequisites: Prerequisite: MATH 2720 (with a grade of “C” or better) or instructor approval.

Credits: 3 hours

 

• To learn the basic notation and terminology in interest theory.

• To be able to do the basic computations for interest, loans, annuities, and bonds. Hopefully, this will include stocks and arbitrage.

• Students should have a basic understanding of how to use a calculator to quickly calculate financial quantities.

 

This class is an in-person class from from 9:00 to 10:15 AM on TuTh in 2209 Rood Hall. Even though roll will not be taken, all students should be in class every day.

The prerequisite for this class is Math 2720. You are responsible for all material in the text and all material presented in class. This includes any material not in the text and all material in the text that was not presented in class.  A list of topics may be available.

It is expected that you will spend enough time outside of class to learn the material in the lectures, text, and homework problems. A list of expectations is available.

The sessions will be recorded and the recordings should be linked to the content section in elearning. The written work done in class sessions will also be posted to the content section of e-learning. The files containing the writing will be in the format for Xournal++. These recordings are only for the use of students in this class. Do not share them.

You are expected to follow all university conduct policies. This includes giving credit on any assignment you turn in for any help you receive and referencing any resources you use that are not from the text or the lectures.

There are some other university policies. you should be aware of.

The last day to withdraw is October 27, 2025.

 

All cameras, cell phones, wireless devices, mp3/mp4 type media players, and similar devices are to be turned off and put away while you are in the classroom. If you ask, you may get an exception for note taking. This means taking written notes, not recording the class. Since the lectures will be posted, you should not be taking a picture of the screen during class. Use of one of these devices during a quiz/exam will be considered cheating.

 

A portion of your grade will come from homework and quizzes. A list of problems to work will be on this web site. Assignments to be turned in will be posted in the dropbox section of elearning. Not all of this homework will be collected, you are responsible for all of the problems on the list. If you have any questions about homework problems, please ask them in class, in office hours, via e-mail, or by making an appointment for an on-line personal session.

All written homework will be submitted as a PDF file through a dropbox in e-learning. Submit all written assignments as a single PDF file containing the solutions to all of the assigned problems. The problems must be legible and in order of section and the numerical order, e.g. section 2.1 problem 1, section 2.1 problem 5, section 2.2 problem 2,... All pages in your PDF must be the same size. If a signed statement is required for the assignment, it is to be the first page of your submission with a written, not typed, signature. Do not submit a zip file. Your name must be in the name of the file. Make certain that you have clicked the submit button for the dropbox in e-learning.

If you get help from a tutor or someone else on a written assignment, that must be noted on your submission. You will not lose points for getting help, but I want to know if a tutor is using methods or notation that are not appropriate.

 

Although artificial intelligence can do many things for people, the goal of this class is not to teach you how to use AI. The goal is for you to increase your understanding of financial mathematics. Since that is the goal of this class and I have seen students using inappropriate tools on assignments without giving appropriate references, most of your grade is from proctored exams and quizzes. For those portions of your grade that are not proctored, you should not use an AI unless you have no other resources. In other words, the text, other students, tutors, other texts, web videos, and your professor must always come before an AI. If you use any resource besides the class text or your professor, it is an academic violation to not include the information of where you got help for the assignment. Waiting until the last few hours before an assignment is due is not a reason to use an AI.

 

Three exams will be given during the term. The dates are on the tentative schedule. Information about the format of the exams will come later.

 

A final exam will be given. The final exam will be given on Tuesday, December 9, 2025 at 8:00 a.m. to 10:00 a.m. in the regular classroom. It will be comprehensive.

 

All exams will follow the following outline: 50% of the questions are things you must be able to do, 25-30% of the problems are things you should be able to do, and 20-25% of the questions are more difficult. It is not uncommon for averages to be around 60% or lower.

To pass this class with a "C" you must demonstrate that you can do all the required material. A starting scale is: A 85%+; BA 78+; B 72+; CB 66+; C 58+; DC 52+; and D 46+. This scale will probably change as the term progresses.

The distribution of points for calculating grades is as follows. The final exam is worth 30%, each of the other exams is worth 15%, and the quizzes, homework, Maple, and other assignments are worth 25% of your grade. The on-line homework is worth 5% of your grade.