4.0

credits

Average Course Rating

This course offers a rigorous treatment of the subject of investment as a scientific discipline. Mathematics is employed as the main tool to convey the principles of investment science and their use to make investment calculations for good decision-making. Topics covered in the course include the basic theory of interest and its application to fixed-income securities, cash flow analysis and capital budgeting, mean-variance portfolio theory, and the associated capital asset pricing model, utility function theory and risk analysis, derivative securities and basic option theory, portfolio evaluation. The student is expected to be comfortable with the use of mathematics as a method of deduction and problem solving. EN.550.342 is intended for students interested in financial mathematics, but without the mathematical background required for EN.550.442. Both EN.550.342 and EN.550.442 will have the same lectures, but the assignments and examinations will differ. Students may not receive credit for both EN.550.342 and EN.550.442.