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Nov 23, 2024
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AC 4204 - Investment and Financial Markets4 lecture hours 0 lab hours 4 credits
Course Description
This is the first of the sequence of two courses to prepare our students for Exam IFM of the Society of Actuaries. This course is to develop the student’s knowledge of certain actuarial models and the application of those models to insurance and other financial risks. (prereq: AC 3303 )
Course Learning Outcomes
Upon successful completion of this course, the student will be able to:
- Understand the assumptions of mean-variance portfolio theory and its principal results
- Understand different methods for the valuation of asset portfolios and explain their appropriateness in different situations
- Understand the notion of efficient markets and explain why market participants may make irrational systematic errors, leading to market inefficiencies
- Understand different ways to measure investment risk and conduct project analysis using advanced techniques used in capital budgeting
- Understand the factors that a company has to consider when deciding its capital structure
- Understand how forward contracts and futures contracts can be used in conjunction with the underlying asset in a risk management context
- Understand how call options and put options can be used in conjunction with the underlying asset inn a risk management context
Prerequisites by Topic
- Calculus
- Probability
- Basic corporate finance
- Interest theory
Course Topics
- Mean-variance portfolio theory
- Asset pricing models
- Market efficiency and behavioral finance
- Investment risk and project analysis
- Capital structure
- Introductory derivatives-forwards and futures
- General properties of options
Coordinator
Dr. Brandon Reid
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