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Financial Mathematics: Applications in Investment Analysis

Course Description

This course is an introduction to Financial Mathematics. It covers areas such as Probability Theory, Markov Processes and their applications in Portfolio Theory and Risk Management. Portfolio Theory involves distribution of wealth among risky assets (such as stocks, bonds, derivative products, etc.) based on the risk tolerance and return potential. Investors, hedge funds, and banks use this theory to construct portfolios to maximize expected returns based on a given level of market risk. This is called Portfolio Theory.

Topics covered include Sample Space and Probability Models, Random Variables, Mean and Variance of a Random Variable, Conditional Probability, Markov Processes, Long and short Positions, Asset Rates of Return, Portfolio Rate of Return, and Optimal Portfolio Selection. Financial simulations are created using historical data to estimate parameters in various cases.

This course includes a variety of mediums for learning, including class lectures/discussions, individual assignments, small group discussions, and group projects and presentations.

Upon successful completion of the course, you will be able to:
• Demonstrate an understanding of basic concepts in Probability such as Sample Space, Probability Models, and Expectations
• Calculate the probability of events for complex outcomes
• Employ methods of probability theory in financial applications
• Identify and differentiate Markov processes from others
• Demonstrate how to employ simulations to gauge future behaviors from historical data
• Illustrate the basic concepts in portfolio theory such as portfolio rate of return and optimal portfolio selection.

Prerequisites

A solid background in basic algebra is needed. No background in Finance or Calculus is required.

Sections

One Section Available to Choose From:

Online sections of Pre-College courses are offered in one of the following modalities: Asynchronous, Mostly asynchronous, or Blended. Please review full information regarding the experience here.


Dates: July 18, 2022 - August 05, 2022
Duration: 3 Weeks
Meeting Times: M-F 12:15P-3:05P
Status: Closed
Format: On-Campus
Instructor(s): Mehdi Khorami
Course Number: 10084