• Class Number 4432
  • Term Code 3130
  • Class Info
  • Unit Value 6 units
  • Mode of Delivery In Person
    • Dr Aaron Bruhn
    • Dr Aaron Bruhn
  • Class Dates
  • Class Start Date 22/02/2021
  • Class End Date 28/05/2021
  • Census Date 31/03/2021
  • Last Date to Enrol 01/03/2021
SELT Survey Results

This course provides an introduction to the valuation of cash flows. Topics include: 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. 

Learning Outcomes

Upon successful completion, students will 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. Describe in detail 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. 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. Demonstrate advanced knowledge of the term structure of interest rates and its applications in forward and spot rates; and
  7. Define in detail the interest rate risk in terms of duration and convexity of fixed interest products, using this to define immunisation and assess its use in mitigating interest rate risk.

Research-Led Teaching

This course covers the relevant parts of the professional Actuaries Institute syllabus, for the subject of CM1: Actuarial Mathematics Core Principles. Wherever possible the examples used in this course will reflect real world situations to emphasize the use of the techniques covered.


Examination Material or equipment

Further information on examination material will be provided to students in lecture time and on Wattle. The final assessment will be held in the exam period with details to be advised no later than teaching week 10 of the semester.

Required Resources

All course notes and materials will be provided via Wattle. You will need access to a calculator to complete exercises required for this course. You will need access to a computer to get the materials necessary for the course. Some in-class work will be illustrated using MS Excel. Learning guides and short video lectures will be made available on wattle for students to learn the application of the concepts taught in this course. Some assignment questions will require the use of MS Excel or a spreadsheet program.

There are no prescribed textbooks for this course.

Staff Feedback

Students will be given feedback in the following forms in this course:

·        Following each assignment, feedback will be given to the whole class about the general performance on each assignment.

·        Students will also have the opportunity to speak with the lecturer and seek comments from the lecturer about their individual performance in the assignments.

Student Feedback

ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.

Other Information


Your final mark for the course will be based on the raw marks allocated for each of your assessment items. However, your final mark may not be the same number as produced by that formula, as marks may be scaled. Any scaling applied will preserve the rank order of raw marks (i.e. if your raw mark exceeds that of another student, then your scaled mark will exceed the scaled mark of that student) and may be either up or down.

Actuarial Profession Information

Exemption from Actuarial Professional examination

The Australian National University is accredited by the Actuaries Institute (IAAust) to provide students with exemptions from the Part I professional examinations of the Institute. Exemptions are recommended subject to obtaining sufficiently high grades in designated courses.

The standard required by the Actuaries Institute for an exemption will be upheld and thus no quota applies to the percentage of students receiving each grade in this course.

University subscription to the Institute of Actuaries

The Actuaries Institute allows students to become IAAust University Subscribers free of charge. Full time undergraduates studying at an accredited university who are members of a university student actuarial society are eligible.

The University Subscriber offer is not a membership of the IAAust but a subscription to receive information on career opportunities, invitations to selected events, and online publications. You might also consider joining the IAAust – there are advantages in doing so while a full-time student.

Class Schedule

Week/Session Summary of Activities Assessment
1 Cash-flow models. Simple and compound interest. Accumulated and present values.
2 Nominal and effective rates of interest and discount. Force of interest.
3 Introduction to annuities and their valuation.
4 Perpetuities. Continuous, increasing, decreasing and indexed annuities. Assignment 1 due: Thursday 18 March
5 Equations of value. Introduction to linear interpolation and annuity tables. Dealing with inflation.
6 Loan valuation and payments. Capital budgeting including NPV, IRR and DPP.
7 Measuring investment performance. TWRR and MWRR.
8 Valuation of fixed interest securities, with and without tax on interest and capital gains.
9 Calculating yields. Allowing for callable features and inflation. Extending to property and share valuation. Assignment 2 due: Thursday 6 May
10 Yield curve and term structure of interest rates. Calculating forward and spot rates.
11 Interest rate risk: duration, effective duration and convexity. Conditions for and determination of immunisation. Assignment 3 due: Thursday 20 May
12 Revision

Tutorial Registration

Tutorials will be available on campus, live through scheduled Zoom sessions and as pre-recorded videos. Information regarding enrolments for these options will be provided on Wattle during O-week, prior to the start of the semester.

Assessment Summary

Assessment task Value Due Date Return of assessment Learning Outcomes
Assignment 1 4 % 18/03/2021 25/03/2021 1
Assignment 2 8 % 06/05/2021 13/05/2021 1-4
Assignment 3 8 % 20/05/2021 27/05/2021 1-5
Final Exam 80 % 03/06/2021 01/07/2021 1-7

* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details


ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:

Assessment Requirements

The ANU is using 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. For additional information regarding Turnitin please visit the ANU Online website. In rare cases where online submission using Turnitin software is not technically possible; or where not using Turnitin software has been justified by the Course Convener and approved by the Associate Dean (Education) on the basis of the teaching model being employed; students shall submit assessment online via ‘Wattle’ outside of Turnitin, or failing that in hard copy, or through a combination of submission methods as approved by the Associate Dean (Education). The submission method is detailed below.

Moderation of Assessment

Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.


All lectures will be pre-recorded. Tutorials will be available on campus, live through scheduled Zoom sessions and as pre-recorded videos. Information regarding enrolments for these options will be provided on Wattle during O-week prior to the start of the semester. Arrangements for consultations will be advised in week 1.


Centrally scheduled examinations through Examinations, Graduations & Prizes will be timetabled prior to the examination period. Please check ANU Timetabling for further information.

Assessment Task 1

Value: 4 %
Due Date: 18/03/2021
Return of Assessment: 25/03/2021
Learning Outcomes: 1

Assignment 1

The details of Assignment 1 including the topic, and the word limit and other requirements, will be made available on Thursday 11 March.

This will count for 4% of your final grade for this course.

It will be due by 4pm on Thursday 18 March.

Assessment Task 2

Value: 8 %
Due Date: 06/05/2021
Return of Assessment: 13/05/2021
Learning Outcomes: 1-4

Assignment 2

The details of Assignment 2 including the topic, and the word limit and other requirements, will be made available on Thursday 29 April.

This will count for 8% of your final grade for this course.

It will be due by 4pm on Thursday 6 May.

Assessment Task 3

Value: 8 %
Due Date: 20/05/2021
Return of Assessment: 27/05/2021
Learning Outcomes: 1-5

Assignment 3

The details of Assignment 3 including the topic, and the word limit and other requirements, will be made available on Thursday 13 May.

This will count for 8% of your final grade for this course.

It will be due by 4pm on Thursday 20 May.

Assessment Task 4

Value: 80 %
Due Date: 03/06/2021
Return of Assessment: 01/07/2021
Learning Outcomes: 1-7

Final Exam

The final assessment will be held in the exam period with details to be advised no later than teaching week 10 of the semester.

This will count for 80% of your final grade for this course.

Academic Integrity

Academic integrity is a core part of the ANU culture as a community of scholars. At its heart, academic integrity is about behaving ethically, committing to honest and responsible scholarly practice and upholding these values with respect and fairness.

The ANU commits to assisting all members of our community to understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to be familiar with the academic integrity principle and Academic Misconduct Rule, uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with.

The Academic Misconduct Rule is in place to promote academic integrity and manage academic misconduct. Very minor breaches of the academic integrity principle may result in a reduction of marks of up to 10% of the total marks available for the assessment. The ANU offers a number of online and in person services to assist students with their assignments, examinations, and other learning activities. Visit the Academic Skills website for more information about academic integrity, your responsibilities and for assistance with your assignments, writing skills and study.

Online Submission

You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment for your records. Unless an exemption has been approved by the Associate Dean (Education) submission must be through Turnitin.

Hardcopy Submission

There are no hardcopy submission for this course.

Late Submission

No submission of assessment tasks without an extension after the due date will be permitted. If an assessment task is not submitted by the due date, a mark of 0 will be awarded.

Referencing Requirements

Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.

Returning Assignments

Assignments will be returned via Wattle.

Extensions and Penalties

Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. Extensions may be granted for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.

Resubmission of Assignments

Students will not be permitted to resubmit assignments.

Privacy Notice

The ANU has made a number of third party, online, databases available for students to use. Use of each online database is conditional on student end users first agreeing to the database licensor’s terms of service and/or privacy policy. Students should read these carefully. In some cases student end users will be required to register an account with the database licensor and submit personal information, including their: first name; last name; ANU email address; and other information.
In cases where student end users are asked to submit ‘content’ to a database, such as an assignment or short answers, the database licensor may only use the student’s ‘content’ in accordance with the terms of service – including any (copyright) licence the student grants to the database licensor. Any personal information or content a student submits may be stored by the licensor, potentially offshore, and will be used to process the database service in accordance with the licensors terms of service and/or privacy policy.
If any student chooses not to agree to the database licensor’s terms of service or privacy policy, the student will not be able to access and use the database. In these circumstances students should contact their lecturer to enquire about alternative arrangements that are available.

Distribution of grades policy

Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.

Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.

Support for students

The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).

Dr Aaron Bruhn
6125 4904

Research Interests

Prior to coming to ANU, Aaron worked as an actuary in Life Insurance and then as a Principal Economic and Financial Advisor in public service. He is interested in a range of areas of actuarial science, including life insurance, superannuation, and a number of non-traditional fields.

Dr Aaron Bruhn

Friday 14:00 15:30
Friday 14:00 15:30
Dr Aaron Bruhn
6125 4904

Research Interests

Dr Aaron Bruhn

Friday 14:00 15:30
Friday 14:00 15:30

Responsible Officer: Registrar, Student Administration / Page Contact: Website Administrator / Frequently Asked Questions