The course aims at providing general and issue-specific knowledge of basic financial calculus and pricing models for bonds . The emphasis is on finite time models without uncertainty. Firstly, necessary mathematical tools for financial calculus are introduced. Then, bonds pricing, the term structure of interest rates and its computation are studied. Finally, Portfolio immunization theory is presented.
Expected learning outcomes
Knowledge and understanding: the student should be able to understand the themes and problems related to the theory of financial calculus and the term structure.
Applying knowledge and understanding: the student should be able to apply the acquired knowledge to concrete problems in specific models. To this purpose, the teacher will illustrate some different examples and specific cases during the lessons; for non-attending students, assistance time will be provided.
Making judgements: the student should be able to use the acquired knowledge also in an autonomous way, by also applying them to specific issues and problems that are more general or different with respect to those illustrated by the teacher.
Communication: the student should be able to answer in a clear and detailed way to the questions of the written examination and to those of the oral examination.
Lifelong learning skills: the student should be able to show a good learning ability, by widening, for example, his/her knowledge with use of relevant bibliographic references.