M 389D M 389D. Introduction to Financial Mathematics for Actuaries. 3 Hours.
Covers the financial derivative topics on the Society of Actuary FM/2 exam: general derivatives, options, hedging, investment strategies, forwards, futures, and swaps. Covers option pricing techniques in the MFE/3F exam: binomial option pricing, Monte Carlo Valuation using risk neutral probabilities, and Black-Scholes. Three lecture hours a week for one semester. Prerequisite: Mathematics 389F.