This course aims to introduce students to the fundamental concepts of financial mathematics and to provide them the quantitative tools for the solution of financial problems under certainty.

Knowledge and understanding: the student will acquire the theoretical elements for a correct methodological setting of quantitative finance problems in order to be able to understand the relevant terms and characteristics, he will be able to use problem solving techniques. Ability to apply knowledge and understanding: the student will be able to solve questions relating to financial evaluations in the economic and business environment, he will be able to rationally choose among several alternatives and decide the best among several options. The exercises carried out during the course aim to use theoretical tools to arrive at clear numerical evaluations. Autonomy of judgment: the student will be aware of the results obtained through the knowledge of the theoretical / technical procedures followed to achieve them; will be able to formulate autonomous and objective judgments and will be able to recognize incorrect or inefficient solutions in an economic-business logic. Communication skills: the student will learn to communicate the results achieved in a simple, unambiguous, and clearly interpreted form, even and above all if they are the result of complex procedures and also to people with different cultural backgrounds, in order to facilitate the exchange of information in key of efficiency. Learning skills: the student will be able to carry out the activities of financial evaluator in the business and economic sphere, making use of the theory lessons and the applications carried out in the computer laboratory, enriched by interactions with the teacher.

Financial operations. Actuarial methods for calculating interests and discounts. Effective rates. Nominal rates. Capital markets. Term structure of prices and interest rates in capital markets. Yield to maturity. Annuities. Present value and accumulated value of an annuity. Annuities classification. Problems concerning constant annuities: determining present value, amounts to pay, number of payments, interest rate. Debt securities: bonds. Bootstrapping. Time and variability indexes. Evaluating and selecting economic-financial projects. Selection criteria: N.P.V., Final Value, T.R.M. and I.R.R. Amortizing a loan. Elementary approach vs. financial approach. Usufruct and bare ownership. Amortization methods. Setting-up a capital.

C. Crenca, P. Fersini, G. Melisi, G. Olivieri, M. Pelle, Elementi di Matematica Finanziaria - Pearson Italia, I ed – Marzo 2018 Additional material on the website learn.luiss.it

Lezione frontale teorica. Lezione frontale teorica e pratica (learning by doing). Lezione online. Test periodico online. Esercitazione, con divisione degli studenti in gruppi, per l’applicazione della teoria alla soluzione di problemi pratici con l’utilizzo di Excel.

Methods for verifying learning for 2nd year students will consist of: a) ongoing assessment of the students' ability to set up and solve the exercises. All students, divided into groups, will have to solve the exercises assigned to them every week and, in turn, explain their progress by interacting with the TA. Each group will be evaluated both in the theoretical bases and in the numerical application and the evaluation will weigh for 30% of the final grade. b) written test (compulsory) to be taken in person (or online according to the university guidelines) in the official exam sessions: specifically 4 Excel exercises in 90 minutes, aimed at assessing the understanding and the ability to solve the fundamental problems of financial mathematics; the results of the written test will weigh 35% on the final evaluation. c) oral exam (mandatory) to be taken in person (or online according to university guidelines) in the official exam sessions: questions on the theory topics covered during the course. The evaluation of the oral exam will account for 35% of the final grade. The final evaluation of the oral exam will contribute, to the extent of 10% (out of the total 35%), the ongoing evaluations that each student will obtain by answering the questions administered weekly on Moodle, concerning the topics covered. Referring to Moodle's test rules (Moodle test about theory) the following rules will be applyed: A) it is not possible to go back (navigate) during the test B) wrong answer: -0.2 answer not given: 0 correct answer: +1 The ongoing activities (exercises with Excel and tests on Moodle) must be carried out by students for at least 80% of both. Those who do not respect this constraint, or who refuse the evaluation attributed by the teacher to the ongoing activity on excel and / or on moodle, will carry out the final written and oral tests respectively with a greater number of exercises for the same time and a greater number of questions, respectively. The evaluation of each test will weigh for 50% of the final mark. For all students of previous years, the rules in force in the year in which the course was followed apply.

Strong interest and attitude towards quantitative subjects. Merit criterion which rewards the better prepared students.