Financial Mathematics

Overview

Value, risk and return - three of the central concerns of finance - all derive from mathematical foundations. Mathematics describes the dynamics of financial markets, it determines the values and risk exposures of financial positions and it connects the performance of financial structures to those structures' constituents. In short, mathematics pervades finance.

Mathematics allows us to describe, understand, measure, manage and engineer financial products and positions for our benefit.

This workshop seeks to make the mathematics of finance accessible by presenting it in a framework increasingly familiar to finance practitioners - that of spreadsheets.

Spreadsheet basis

Framing this workshop in a spreadsheet format confers the following benefits.

• Many finance practitioners use spreadsheets day-to-day in their roles.
• Spreadsheets contain many useful and powerful mathematical and financial functions.
• Spreadsheets provide the computing power to use techniques - like iteration and simulation - that are unfeasible or too tedious to be performed by hand or on calculators.
• Spreadsheets provide extensive charting tools. Charts are useful in visualising and interpreting patterns, trends, features and anomalies in mathematical functions.
• Spreadsheets make it easy to perform sensitivity analyses, to "stress-test" mathematical formulae and to determine their behaviours in extreme conditions.
• Spreadsheets can act as an independent "reality check" on numbers generated by theory or by other methods.

About the facilitator

This course's facilitator is Alex Palfi. Alex had ten years of experience with Macquarie Group in presenting finance courses internationally. He has presented courses in financial modelling, spreadsheet skills, visual basic, valuation, and option pricing and risk management in London, New York, Los Angeles, Tokyo, Hong Kong, Taipei, Singapore, Thailand, South Africa, Brazil, Australia & New Zealand.

Alex has worked in Investment banking, commercial banking and software development industries. Alex's university qualifications are in engineering. He obtained Masters and Bachelors degrees in Electrical Engineering from the University of Canterbury in New Zealand.

Audience

This course is aimed at those who wish to apply key mathematical concepts and principles to understanding and analysing financial products and positions.

Level

This is an intermediate level course.

Duration

This is a two day course.

Prerequisites

Participants should be able to use spreadsheet absolute and relative addressing (e.g. $B$5 / B5) and be able to enter mathematical formulae into cells [e.g. =1/(1+.04)^4]. Participants should understand and be able to apply the concepts of discounting, present and future value and simple and compound interest.

Format

The course has a "hands-on" format. Each participant works with a laptop for the major part of the course on practical financial mathematics topics.

Following is an overview of this course's content.

Register

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