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Lecturer(s)
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Course content
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FOR WINTER SEMESTER OF SCHOOL YEAR 2023/2024 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. Single-decrement population life table, types of life tables, balancing. Technical interest rate, commutation-columns 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://home.zcu.cz/~friesl/Vyuka/Fipm.html
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Learning activities and teaching methods
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Lecture with practical applications, Discussion, One-to-One tutorial, Group discussion, Skills demonstration, Task-based study method, Individual study, Students' self-study, Self-study of literature
- Contact hours
- 52 hours per semester
- Undergraduate study programme term essay (20-40)
- 16 hours per semester
- Preparation for an examination (30-60)
- 40 hours per semester
- Preparation for formative assessments (2-20)
- 26 hours per semester
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| prerequisite |
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| Knowledge |
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| proficiency in secondary-school 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 |
| Prior completion of a basic course of probability (probability, random variable, expectation, variance, covariance, correlation coefficient) |
| general awareness of financial concepts (stocks, bonds, insurance, savings, etc.) |
| Skills |
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| proficiency in secondary-school 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) |
| Competences |
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| N/A |
| learning outcomes |
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| Knowledge |
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| to make use of mostly secondary-school mathematics to solve problems in treated areas of financial mathematics and life insurance |
| Skills |
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| to make use of mostly secondary-school mathematics to solve problems in treated areas of financial mathematics and life insurance |
| Competences |
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| N/A |
| teaching methods |
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| Knowledge |
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| Task-based study method |
| Skills demonstration |
| Group discussion |
| Self-study of literature |
| Individual study |
| One-to-One tutorial |
| Interactive lecture |
| Discussion |
| Skills |
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| Interactive lecture |
| Discussion |
| One-to-One tutorial |
| Group discussion |
| Skills demonstration |
| Task-based study method |
| Individual study |
| Self-study of literature |
| Competences |
|---|
| Interactive lecture |
| Discussion |
| One-to-One tutorial |
| Group discussion |
| Skills demonstration |
| Task-based study method |
| Individual study |
| Self-study of literature |
| assessment methods |
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| Knowledge |
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| Combined exam |
| Skills demonstration during practicum |
| Seminar work |
| Skills |
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| Seminar work |
| Combined exam |
| Skills demonstration during practicum |
| Competences |
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| Seminar work |
| Combined exam |
| Skills demonstration during practicum |
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Recommended literature
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Blake, David. Analýza finančních trhů. 1. vyd. Praha : Grada, 1995. ISBN 80-7169-201-8.
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BRADA, J. Teorie portfolia. 1. vyd. Praha : Vysoká škola ekonomická, 1996. ISBN 80-7079-259-0.
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CIPRA, T. Praktický průvodce finanční a pojistnou matematikou. Praha : HZ, 1995.
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Cipra, Tomáš. Finanční matematika v praxi. 1. vydání. Praha : Nakladatelství HZ, 1997. ISBN 80-901495-1-0.
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Friesl, Michal; Šedivá, Blanka. Finanční matematika hypertextově. Plzeň : Západočeská univerzita, 2003.
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Mc Cutcheon, J.J., Scott, W.F. An Introduction to the Mathematics of Finance. 1991.
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Walter J., Radová J. Základy finanční a pojistné matematiky. Praha, 1995.
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