Ateneo - UPO

The course focuses on elements of basic financial mathematics. In particular, it focuses on capitalization and discount operations, determining loan amortization schedules, and making financial choices using the NPV criterion.

Compulsory materials will be made available on the DIR page of the course. A useful, non compulsory, textbook is:
Mauro D’Amico, Lorenzo Peccati (2016). Metodi matematici, statistici e finanziari per giuristi . 7a edizione. Milano

The course is aimed at providing the students with a satisfactory knowledge and understanding of the key financial operations and of the mathematical tools related to them as well as of their range of applicability. As such, the application of the methodologies and the use of the proposed tools are intended as a means to achieve the objectives of the course and not as its last goal.

The course is worth 3 ECTS credits, corresponding to 22.5 hours of face-to-face teaching. Overall, approximately 15 hours are delivered as direct instruction (DE) and 7.5 hours as interactive teaching (DI). The allocation between these two teaching modes is flexible and may vary across individual class sessions.

Basic algebra.

Lectures.

Attendance is not mandatory but is strongly recommended. Students with physical disabilities, Learning Disabilities or Special Education Needs can request specific services and tools via the Staff Sviluppo e Coordinamento Carriere e Servizi alle Studentesse e agli Studenti, consulting the University webpage: https://www.uniupo.it/en/services/servicesstudents-physical-or-learning-disabilities. Students with disabilities, learning disabilities or special education needs, once they have contacted the University Staff, can refer to the tutor in charge of the course to define the examination modalities, concerning academic aspects.

The exam consists of a compulsory written test, with a possible confirmation oral exam, and an optional oral exam.

The written test consists of 8 multiple-choice questions (4 related to Quantitative Methods 1 and 4 related to Quantitative Methods 2). Each question has 5 possible answers, of which only one is correct, and the test must be completed within 90 minutes. Each answer provided must be accompanied by an explanation/justification. Each correct answer that is properly justified is worth one point. Each incorrect answer, unanswered question, or answer provided without justification or with an incorrect justification receives 0 points.

The written test has a maximum score of 26/30 (8 correct answers) and is considered passed only if the student obtains at least two correct answers in both Quantitative Methods 1 and Quantitative Methods 2. The written test is concluded only after the possible confirmation oral exam, if the Professor deems that clarification on the submitted work is necessary. Failure to attend the confirmation oral exam results in an insufficient grade for the written test. The questions cover the course topics and aim to verify the skills achieved in applying acquired knowledge to solve problems.

The optional oral exam is available to students who obtain a passing grade (greater than or equal to 20/30) in the written test and may result in a change of the written-test score ranging from −3 to +4 points. Students must first demonstrate the ability to identify any errors made in the written exam, pinpointing the correct approaches and providing a clear explanation. In addition, a score of up to 2 points requires demonstrating a sufficiently broad knowledge and understanding of the course contents that, in particular, enables the student to establish connections between different topics. To achieve a score of 3 to 4 points, students must be able to independently apply their knowledge and understanding of the course content to engage in an in-depth discussion on critical aspects related to the subjects covered, using clear and rigorous language.

The final grade is the sum of the grades obtained in the written test and, if taken, the oral exam, up to a maximum of 30/30 with honors. The awarding of honors is subject to the student’s ability to independently solve some questions (exercises or more theoretical questions) of above-average difficulty.

Further details regarding the exam procedures are published on the course DIR page

Financial operations: amounts, maturities, principal, amount, interest, interest rate, discount, discount rate, nominal value, present value, capitalisation and discounting (and factors). Financial regimes: simple interest, simple discount, compound interest, compound discount, equivalent rates, commercial discount. Bonds: zero coupon bonds and coupon bonds. Classification and evaluation of anticipated and deferred financial annuities. Perpetual annuities (hints). Forms of repayment of a loan: general. Amortization of a loan: elementary setup and financial setup.

Knowledge and understanding
By the end of the course, students will be able to understand the main concepts and methods of financial mathematics relating to compound interest and discounting, annuities, bonds, loan amortization, and the evaluation of financial decisions. They will also be able to understand and analyze simple economic and financial problems that are relevant in the legal field, including the valuation of cash flows, loans, amortization schedules, and other financial transactions.

Applying knowledge and understanding
Students will be able to identify and apply the appropriate financial mathematics tools to solve simple financial problems and to interpret the results obtained.

Making judgements
Students will be able to compare financial alternatives using the evaluation criteria covered in the course, formulate well-reasoned judgments, and critically interpret the results of quantitative analyses. They will also be able to use these tools to understand and assess economic and financial situations that may arise in professional legal practice.

Communication skills
Students will be able to clearly describe the procedures followed and communicate the economic and financial meaning of the results in a clear and accurate manner.

Learning skills
Students will be able to use the knowledge and tools acquired independently to address problems similar to those covered during the course and to pursue further study in quantitative finance-related topics.

Minimum expected learning outcomes: to achieve a passing grade, students are expected to demonstrate knowledge of the fundamental concepts of financial mathematics covered in the course and the ability to correctly apply the main techniques to standard problems, providing a concise but accurate justification of the procedures used.

Advanced expected learning outcomes: an advanced level of achievement is demonstrated when, in addition to full mastery of the methods and techniques covered in the course, students are able to tackle non-routine problems independently, select the most appropriate solution method, justify their choices, and critically interpret the results obtained.