• Offered by Rsch Sch of Finance, Actuarial Studies & App Stats
  • ANU College ANU College of Business and Economics
  • Classification Transitional
  • Course subject Statistics
  • Areas of interest Actuarial Studies, Finance, Statistics
  • Academic career PGRD
  • Mode of delivery In Person
  • Co-taught Course
  • Offered in First Semester 2017
    Second Semester 2017
    See Future Offerings

Compound interest functions; valuation of annuities certain; loans repayable by instalments; comparison of value and yield of cash flow transactions; valuation of fixed interest securities, with and without tax on interest and capital gains; duration and volatility of securities; introduction to concept of immunisation and matching; consumer credit contracts; introduction to stochastic interest rate models. 

Learning Outcomes

Upon successful completion, students will have the knowledge and skills to:

Upon successful completion of the requirements for this course, students should have the
knowledge and skills to:

1. Define and describe in detail the use of cash flow models, simple and compound rates of interest and discount as well as compare and distinguish between nominal and effective rates of interest and discount.
2. Have a thorough knowledge of the various types of annuities and perpetuities and use them to solve financial transaction problems.
3. Derive equations of value and various tools like linear interpolation & annuity tables.
4. Be able to communicate the difference in capital budgeting decision tools like Net Present Values, Internal Rates of Return and Discounted Payback Periods.
5. Analyse in depth basic fixed interest financial transactions like Loan Valuation, Fixed Interest securities (eg. Bonds) and employ the skills developed in this course to evaluate such transactions. Incorporate the effects of taxation on such financial transactions.
6. Explain the details of arbitrage and its use in the valuation of forward contracts. Employ term structure of interest rates to calculate forward and spot rates.
7. Define interest rate risk in terms of duration and convexity of fixed interest products. Define immunisation and assess its use in mitigating interest rate risk
8. Be able to communicate the basics of stochastic interest rate models and use it to evaluate simple cash flow models.

Other Information

See the course outline on the College courses page. Outlines are uploaded as they become available. 

Indicative Assessment

Typical assessment may include, but is not restricted to: in-class quizzes and a final exam.

The ANU uses Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. While the use of Turnitin is not mandatory, the ANU highly recommends Turnitin is used by both teaching staff and students. For additional information regarding Turnitin please visit the ANU Online website.

Workload

Students are expected to commit at least 10 hours per week to completing the work in this course. This will include at least 3 contact hours per week and up to 7 hours of private study time.

Requisite and Incompatibility

To enrol in this course you must have completed STAT7055 or be enrolled in the Master of Statistics, Master of Actuarial Studies or Master of Actuarial Practice. Incompatible with STAT2032.

Specialisations

Fees

Tuition fees are for the academic year indicated at the top of the page.  

If you are a domestic graduate coursework or international student you will be required to pay tuition fees. Tuition fees are indexed annually. Further information for domestic and international students about tuition and other fees can be found at Fees.

Student Contribution Band:
2
Unit value:
6 units

If you are an undergraduate student and have been offered a Commonwealth supported place, your fees are set by the Australian Government for each course. At ANU 1 EFTSL is 48 units (normally 8 x 6-unit courses). You can find your student contribution amount for each course at Fees.  Where there is a unit range displayed for this course, not all unit options below may be available.

Units EFTSL
6.00 0.12500
Domestic fee paying students
Year Fee
2017 $3660
International fee paying students
Year Fee
2017 $4878
Note: Please note that fee information is for current year only.

Offerings and Dates

The list of offerings for future years is indicative only

First Semester

Class number Class start date Last day to enrol Census date Class end date Mode Of Delivery Class Summary
2692 20 Feb 2017 27 Feb 2017 31 Mar 2017 26 May 2017 In Person N/A

Second Semester

Class number Class start date Last day to enrol Census date Class end date Mode Of Delivery Class Summary
8390 24 Jul 2017 31 Jul 2017 31 Aug 2017 27 Oct 2017 In Person N/A

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