Math 370: Financial Mathematics
Meets: Tuesday and Thursday from 3:00 to 4:15
LILY G126
Instructor: Jeff Beckley
Office: 703 Mathematics Building Phone: 49—41861 or 317-698-8543
E-mail:
Web http://www.math.purdue.edu/~jbeckley/MA370
Office Hours:
Tuesday 1:00 – 2:30
Thursday 1:00 – 2:30
or by appointment
General Information
The course will cover the learning objectives for the Society of Actuaries Examination FM and the Casualty Actuarial Society Examination 2. The Course will double as preparation course for Exam FM/Exam 2. Exam preparation problems will be assigned weekly. These problems are optional for this class, but are essential for those students who intend to take the actuarial examination in May.
Textbook: The Theory of Interest, Second Edition
By Steven Kellison
Published by Irwin/McGraw Hill, ISBN 0-256-09150-1
Actex Study Manual: SOA Course FM and CSA Exam 2: 2005 Edition by Richard London and Nicholas Mocciolo. Published by Actex, Mad River Books. ISBN 1-56698-501-3
A supplemental textbook, which is not required, can be used to help in problem solutions: Theory of Interest Solutions Manual By Richard London. Published by Actex, Mad River Books. ISBN 1-56698-389-4
Calculators
The only calculators permitted will be those permitted to be used on the Society of Actuaries examinations in the Spring of 2005. Please see http://www.soa.org/ccm/content/exams-education-jobs/candidate-and-exam-information/spring-exam-session/approved-calculators-for-spring-2005-examinations/. The best is the Texas Instruments BAII Plus. It comes in either a solar or battery powered version.
The following link will take you to a website which contains instructions on using whichever calculator you elect to use: http://www.soa.org/ccm/content/exams-education-jobs/candidate-and-exam-information/spring-exam-session/study-notes/spring-2005-exam-fm/
The student is expected to learn the functionality of the calculator as part of the preparation for class exams and the Exam FM/Exam 2.
Procedures
The first 15 minutes of each class will be spent on homework problems. This will only provide for coverage of two or three problems. If you are having problems with homework, please come and see me during office hours.
Evaluation will be based on a combination of tests, quizzes, and homework assignments.
There will be 8 quizzes during the semester. Quizzes will not be announced.
There will be 2 tests of an hour and 15 minutes each and a two hour final.
All tests and quizzes will be closed book and closed notes. Calculators are allowed. Quizzes cannot be made up under any circumstances. There will be no makeup exams except in extreme circumstances and then only with a prior arrangement with the instructor.
Final grades will be based on the following weights:
Quizzes / 20%Homework / 10%
Test 1 / 20%
Test 2 / 20%
Final / 30%
Total / 100%
There will be a sample actuarial exam given on April 26th. This will NOT factor into your grade but is given as part of the preparation for the actuarial exams to be given in May.
Homework: Doing the homework is essential to understanding the material. No homework will be accepted past the due date, but your lowest two homework scores will be dropped.
As noted above, additional exam preparation homework will be assigned each week. This will NOT factor into your grade for this class, but is essential if you expect to pass the actuarial exam.
For homework and quizzes, answers are expected to include all the work necessary to do the problem. The tests will be primarily multiple choice and will be machine graded.
Academic Adjustments
Students who have been certified by the Office of the Dean of Students -- Adaptive Programs as eligible for academic adjustments should go to MATH 909 and request an Information Sheet for this semester that explains how to proceed this semester to get these adjustments made in Mathematics courses. (Procedures are not the same as last semester.) This should be done during the first week of classes. Only students who have been certified by the ODOS-Adaptive Programs and who have requested ODOS to send their certification letters to their instructors are eligible for academic adjustments.
Students who are currently undergoing an evaluation process to determine whether they are eligible for academic adjustments, are encouraged to find out now what procedures they will have to follow when they are certified, by requesting the above mentioned Information Sheet from MATH 909.
Large print copies of the Information Sheet are available from MATH 909 upon request.
Course Outline
While this outline tries to be complete and accurate, there will be changes in the schedule of the course; these will be announced in class and on the web. The reading is to be done by the date listed and the homework is to be turned in on the date listed. For example, prior to class on January 13, you are to read Sections 1.1 to 1.5 in the book and you will turn in the Homework listed on the 13th.
The Exam Preparation questions listed are from the first ten Practice Multiple Choice tests from Actex Study Manual. The key is Test Number.Problem Number. For example, 2.10 is Problem 10 from Practice Multiple Choice Test 2. Problems labeled BX are problems created by me which will be handed out.
Day / Date / Reading / Homework / Exam PreparationTu / 1/11
Th / 1/13 / 1.1-1.5 / 1,3,4,5,6,8
Tu / 1/18 / 1.6-1.8 / 9,11,12,13,14,15,16,17 / 2.10, B1-B6
Th / 1/20 / 1.9-1.11 / 18 - 23, 26 - 35 / 7.1, 10.10, B7-B12
Tu / 1/25 / 2.1-2.5 / 38,39,40,41(a),42 - 52 / 1.1, 1.6, 2.16, 3.2, 3.11, 4.2, 4.6, 4.10, 5.1, 5.2, 5.5, 5.14, 6.1
Th / 1/27 / 2.6-2.8 / 1 - 11 / 1.15, 2.1, 2.14, 3.1, 3.7, 4.14, 5.3, 5.4, 5.15, 5.17, 6.2, 6.3, 6.14
Tu / 2/1 / 3.1-3.5 / 12 - 28, 30 - 32 / 1.12, 2.3, 2.4, 2.6, 2.12, 4.7, 4.15, 6.4
Th / 2/3 / 3.7-3.9 / 1 - 27 / 1.11, 2.7, 2.15, 3.4, 3.14
Tu / 2/8 / Review / 32 - 36, 38 – 45, 52, 53 / 2.9, 6.7, 7.6, 7.17, 8.7, 10.11
Th / 2/10 / Test 1 / 1.10
Tu / 2/15 / Discussion of Test / 7.2, 7.3, 7.4, 7.5, 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.15, 9.1, 9.2, 9.4, 9.5, 9.7, 9.11
Th / 2/17 / 4.1-4.4 / 9.13, 9.15, 10.1, 10.2, 10.3, 10.5, 10.7, 10.12, 10.13, 10.14
Tu / 2/22 / 4.5-4.6 / 1-3,18-22 / 3.6, 3.17
Th / 2/24 / 4.7-4.9 / 23-28, 30-38 / 1.5, 3.3, 4.1, 5.8, 8.9
Tu / 3/1 / 5.1-5.4 / 40, 42-48, 50-51 / 1.2, 1.3, 1.8, 2.11, 3.10, 3.15, 4.8, 4.12, 4.16, 5.7, 5.10, 5.11, 5.16, 6.5, 6.6
Th / 3/3 / 5.5-5.7 / 1-4,7,9-14 / 1.14, 3.13, 4.3, 6.16
Tu / 3/8 / Review / 15-18,21-23,25-26 / 3.9, 3.16, 7.7, 7.8, 7.9, 7.15, 8.8, 8.11, 9.3, 9.6, 9.9, 9.10, 10.4
Th / 3/10 / Test 2
Tu / 3/15 / NO CLASS / Spring Break
Th / 3/17 / NO CLASS / Spring Break
Tu / 3/22 / 6.1-6.3
Th / 3/24 / 6.4-6.6 / 1-19 / 2.5, 2.13, 3.12, 4.4, 4.13, 6.8, 6.12, 6.15, 7.16, 10.6, 10.15, B13-B42
Day / Date / Reading / Homework / Exam Preparation
Tu / 3/29 / 7.1-7.3 / 20-21, 23-29 / 1.7, 4.9, 5.6, 5.9, 6.9, 6.10, 6.13, 7.10, 7.11, 7.12, 8.10, 8.12, 8.16, 9.14, 10.9
Th / 3/31 / 7.4-7.6 / 1-12 / 1.9, 1.13, 2.2, 2.6, 3.5, 3.8, 4.5, 5.12, 6.11, 7.13, 8.13, 8.14, 9.8, 9.12, 10.8, 10.16
Tu / 4/5 / 7.7,7.10-7.11 / 16-19, 22-25, 27-30 / 1.4, 4.11, 7.14, 9.16, 10.17, B43-B57
Th / 4/7 / 8.3,8.7-8.8 / 31-35, 48-50, 52 / 2.17, 4.17, 6.17, 8.17, 9.17, B58-B62
Tu / 4/12 / 9.1-9.4 / 10-18 / 1.16, 5.13, Practice Mult Ch Test 11
Th / 4/14 / 9.5-9.7 / 1-6 / B63-B80
Tu / 4/19 / 9.8-9.10
Appendix VIII / 7-11, 13-21 / B81-B95
Th / 4/21 / Review and Exam Prep / 24-28,30-41 / 1.17, B96-B110
Tu / 4/26 / Sample Exam FM/Exam 2
Th / 4/28 / Review and Exam Prep
Finals / ?? / Final Exam
2 hours
Exam FM/Exam 2 Preparation
Exam FM/Exam 2 is will be offered by the Society of Actuaries and the Casualty Actuarial Society on May 26th. If you want to pass Exam FM/Exam 2 in May, I strongly recommend that you invest 250 hours of study time for the Exam. The 250 hours would include anytime spent for this class, plus additional time working as many problems as possible. During the first day of class, I will go over a recommended study program for those students planning on taking Exam FM/Exam 2.
Students Not Taking Exam FM/Exam 2
If you are not taking Exam FM/Exam 2, you only need to do the Homework from Kellison. If you master these problems and the material, you should have no problem achieving an A in the Course.