Lecturer(s)


Friesl Michal, Mgr. Ph.D.

Marek Patrice, Ing. Ph.D.

Tomiczková Světlana, RNDr. Ph.D.

Course content

FOR WINTER SEMESTER OF SCHOOL YEAR 2017/2018 Introduction  simple and compound interest. Interest rate and discount rate. Nominal interest rate. Time value of money. Effective interest rate and nominal interest and discount rate. Present value, discrete cash flow. Annuities  annuity in arrears and annuity in advance ? present and future value. More payment in one period, postponed annuity. Investment decisions according to present value, payback period. Internal rate of return, inflation. Funds  rate of profit. Duration. Debt payment  sum payable, principal and interest payment. Constant repayment. Bonds  bond and its price, yield to redemption, duration. Portfolio analysis. Expected return and its risk. Markowitz model, tangency portfolio. Capital asset pricing model (CAPM), market portfolio, CML. Life tables. Singledecrement population life table, types of life tables, balancing. Technical interest rate, commutationcolumns numbers. Life insurance. Endowment insurance, death insurance, mixed insurance, pension insurance and their present value. Equivalence principle, net premium. Operating expenses, gross premium. Reserves in life insurance. Net reserve, risk and deposit part. Gross reserve, surrender, changes within insurance. Additional information on the web page https://courseware.zcu.cz/portal/studium/courseware/kma/fipm

Learning activities and teaching methods

Lecture with practical applications, Discussion, OnetoOne tutorial, Group discussion, Skills demonstration, Taskbased study method, Individual study, Students' selfstudy, Selfstudy of literature
 Contact hours
 52 hours per semester
 Undergraduate study programme term essay (2040)
 16 hours per semester
 Preparation for an examination (3060)
 40 hours per semester
 Preparation for formative assessments (220)
 26 hours per semester

prerequisite 

professional knowledge 

Proficiency in secondaryschool mathematics (arithmetic and geometric sequence and their sums, linear, power, exponential, logarthmic functions and their properties, equations and inequalities, linear interpolation ...), basic linear algebra (matrix multiplication), and differential calculus, and above all the ability to think. Prior completion of a basic course of probability (probability, random variable, expectation, variance, covariance, correlation coefficient) and general awareness of financial concepts (stocks, bonds, insurance, savings, etc.) is appropriate. 
learning outcomes 

To use mostly secondaryschool mathematics to solve problems in treated areas of financial mathematics and life insurance. 
teaching methods 

Taskbased study method 
Skills demonstration 
Group discussion 
Students' selfstudy 
Selfstudy of literature 
Individual study 
OnetoOne tutorial 
Lecture with practical applications 
Discussion 
assessment methods 

Combined exam 
Skills demonstration during practicum 
Seminar work 
Recommended literature


Blake, David. Analýza finančních trhů. 1. vyd. Praha : Grada, 1995. ISBN 8071692018.

BRADA, J. Teorie portfolia. 1. vyd. Praha : Vysoká škola ekonomická, 1996. ISBN 8070792590.

CIPRA, T. Praktický průvodce finanční a pojistnou matematikou. Praha : HZ, 1995.

Cipra, Tomáš. Finanční matematika v praxi. 1. vydání. Praha : Nakladatelství HZ, 1997. ISBN 8090149510.

Friesl, Michal; Šedivá, Blanka. Finanční matematika hypertextově. Plzeň : Západočeská univerzita, 2003.

Mc Cutcheon, J.J., Scott, W.F. An Introduction to the Mathematics of Finance. 1991.

Walter J., Radová J. Základy finanční a pojistné matematiky. Praha, 1995.
