|Unit convenor and teaching staff||
Unit convenor and teaching staff
Contact via iLearn Dialog
Refer to the unit's web site
ACST101(Cr) and MATH133 and GPA of 2.50 (out of 4.0)
This unit provides a rigorous mathematical development of compound interest theory, using calculus where appropriate, applying the theory to problems more complex than those encountered in ACST101. Topics include the force of interest and its relationship to interest rates, inflation and capital gains tax, discrete and continuous term certain annuities, project appraisal, loans, bonds, yield curves, matching and immunisation, pricing by the 'no arbitrage' assumption, and forward rate agreements. Students are assumed to be able to use the basic functionality of a spreadsheet package of their choice. The concepts developed in this unit are required in several subsequent units in the actuarial degree. Students gaining a grade of credit or higher in this unit are eligible for exemption from subject CT1 of the professional exams of The Institute of Actuaries of Australia.
Information about important academic dates including deadlines for withdrawing from units are available at http://students.mq.edu.au/student_admin/enrolmentguide/academicdates/
Macquarie University uses the grades HD, D, Cr, P and F for grading the achievements of students in units of study. The meaning of each symbol is explained in Schedule 1 of the Assessment Policy, available at
When you work as an actuary or in any other profession, if you have a dangerous misunderstanding of a concept you may provide incorrect advice to a client, possibly with severe financial consequences for your client and yourself. However, if you realise that you don’t understand a concept you may refrain from giving advice on it until you have filled the gaps in your knowledge. That is, dangerous misunderstandings have more serious consequences than a recognised lack of knowledge.
The grading philosophy and marking scales adopted in this unit (and in many other university units) reflect this situation. Correct relevant statements earn marks. Statements revealing dangerous misunderstandings result in the deduction of marks. If your answers reveal that your misunderstandings are very severe or numerous, you might earn a negative mark for a question. If a part of a question is worth x marks, the smallest mark you can be allocated for that part is –x marks.
As an example, a minor error when keying numbers into your calculator is not usually regarded as a dangerous error provided the resulting incorrect answer is plausible. However, if a calculator error results in an obviously unreasonable answer, such as a present value of a future cash flow which exceeds the size of that future cash flow, or a level monthly loan repayment that exceeds the amount of the loan, and you fail to state that you realise this answer is unreasonable, this would be regarded as a dangerous misunderstanding.
It is the responsibility of students to view their marks for each within session assessment on iLearn within 20 working days of posting. If there are any discrepancies, students must contact the unit convenor immediately. Failure to do so will mean that queries received after the release of final results regarding assessment marks (not including the final exam mark) will not be addressed.
Assessment criteria for all assessment tasks will be provided on the unit iLearn site.
|Quizzes||40%||No||Various - See iLearn calendar|
|Final Examination||60%||No||Standard Exam Period|
Due: Various - See iLearn calendar
You should complete these quizzes online. They are on this unit's iLearn web site.
In answering the assessable quizzes, you may consult your notes or any textbooks you like, but you may not seek assistance from any humans in any way whatsoever. This includes seeking assistance in interpreting what the questions mean. You should not discuss any of the quiz questions with any of your class mates until after the deadline for submitting the quiz has passed, even if you have already submitted the quiz and so can no longer change your answers.
There are 7 quizzes covering topics 1 to 7.
Once you start a quiz, you have a maximum of 1 hour to complete it.
For topics 1 to 6, the quiz for a topic becomes available at 12:01 am on the Saturday after the tutorial on that topic and becomes unavailable at 11:59pm on the following Monday. That is, the quiz is available for 2 minutes less than 3 days. (We are avoiding using midnight as a cutoff time due to confusion as to whether "midnight Friday" means "midnight at the start of Friday" or "midnight at the end of Friday".) You may start the quiz at any time within that range, but if you start it within 1 hour of the end of that range then it still closes at the end of that range, meaning you get less than 1 hour to complete it.
For quiz 7, using the above approach would put the entire quiz availability period in the mid-session break. Hence the dates for that quiz have been moved 2 weeks later, which puts the last day of the availability period in week 8 of the session.
The simplest way to view the exact days on which each quiz opens and closes is to use the calendar tool within iLearn.
Your total quiz mark is the sum of your marks from each quiz. Since the quizzes have different numbers of questions, this means the quizzes are not equally weighted in the assessment.
No extensions will be granted. Students who have not submitted the task prior to the deadline will be awarded a mark of 0 for the task, except for cases in which an application for disruptions to studies is made and approved.
The quizzes provide early feedback, with the results of the first quiz becoming available early in week 3.
Due: Standard Exam Period
The length of the exam is 3 hours plus 10 minutes reading time.
Students are permitted to use non-programmable calculators with no text-retrieval capacity.
The exam is closed book. You may not bring any notes or textbooks into the exam. The exam paper includes a formulae sheet and a table giving the number of each day of the year.
Schedule 4 of the Assessment Policy includes the rules students must abide by during University examinations. The schedule is available at: http://www.mq.edu.au/policy/docs/assessment/schedule_4.html
In the exam, you are required to write your answers on the ruled (right hand) pages of the answer booklet provided. Anything written on the unruled (left hand) pages will not be marked.
There are 4 hours of face-to-face teaching per week consisting of 3 hours of lectures and 1 hour of tutorial.
Class times can be found at: http://www.timetables.mq.edu.au/
No textbooks are prescribed for this unit. Detailed notes, exercises and solutions are available on the unit's web site. The web site also contains a list of all textbooks we are aware of covering significant amounts of the material in this unit.
You will require a calculator. For the test and the final exam, you may only use non-programmable calculators which are not able to store text.
You may find it useful to be able to construct spreadsheets to verify your solutions to tutorial exercises. We do not prescribe any particular brand of spreadsheet.
We are required to point out that you need access to a computer and the internet to access this unit guide. (So if you don't have access to a computer and the internet, then you are probably not reading this sentence. Perhaps you are dreaming.) You also need access to a computer and the internet to access the course material on the unit's iLearn web site.
The web site for this unit can be accessed at http://ilearn.mq.edu.au
This unit is taught via lectures and tutorials. However, a significant amount of the lecture time will be spent on attempting problems. The emphasis is on learning by doing.
Since students often seem to print the schedule, it is provided in a printer-friendly form in the administration section of this unit's iLearn web site.
Macquarie University policies and procedures are accessible from Policy Central. Students should be aware of the following policies in particular with regard to Learning and Teaching:
Academic Honesty Policy http://mq.edu.au/policy/docs/academic_honesty/policy.html
Assessment Policy http://mq.edu.au/policy/docs/assessment/policy_2016.html
Grade Appeal Policy http://mq.edu.au/policy/docs/gradeappeal/policy.html
Complaint Management Procedure for Students and Members of the Public http://www.mq.edu.au/policy/docs/complaint_management/procedure.html
Disruption to Studies Policy (in effect until Dec 4th, 2017): http://www.mq.edu.au/policy/docs/disruption_studies/policy.html
Special Consideration Policy (in effect from Dec 4th, 2017): https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policies/special-consideration
In addition, a number of other policies can be found in the Learning and Teaching Category of Policy Central.
Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/support/student_conduct/
Results shown in iLearn, or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au.
Information regarding supplementary exams, including dates, is available at:
Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/
Learning Skills (mq.edu.au/learningskills) provides academic writing resources and study strategies to improve your marks and take control of your study.
For all student enquiries, visit Student Connect at ask.mq.edu.au
Students with a disability are encouraged to contact the Disability Service who can provide appropriate help with any issues that arise during their studies.
For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/.
When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.
Our graduates will take with them the intellectual development, depth and breadth of knowledge, scholarly understanding, and specific subject content in their chosen fields to make them competent and confident in their subject or profession. They will be able to demonstrate, where relevant, professional technical competence and meet professional standards. They will be able to articulate the structure of knowledge of their discipline, be able to adapt discipline-specific knowledge to novel situations, and be able to contribute from their discipline to inter-disciplinary solutions to problems.
This graduate capability is supported by:
We want our graduates to be capable of reasoning, questioning and analysing, and to integrate and synthesise learning and knowledge from a range of sources and environments; to be able to critique constraints, assumptions and limitations; to be able to think independently and systemically in relation to scholarly activity, in the workplace, and in the world. We want them to have a level of scientific and information technology literacy.
This graduate capability is supported by:
There have been no significant changes to the unit's content since the previous offering. The assessment scheme has been adjusted to comply with the new University Assessment Policy, which first applies for Session 2, 2016.
Mathematics of finance has a long history. Most of the mathematical theory used in this unit was developed over a century ago. Hence the research we are using can be found in textbooks on mathematics of finance, rather than needing to source recent research papers.
The development of computers in the 1960s, cheap electronic calculators in the 1970s and spreadsheets in the 1980s revolutionised the subject of mathematics of finance. Before computers many maths of finance problems were conceptually simple but the sheer length of the calculations required made exact calculations expensive to implement, and many clever approximate techniques were developed to work around this. Now, many approximate techniques are not required, since computers can easily implement the lengthy calculations required to apply the theory exactly. While a textbook from 50 years ago might contain many concepts that are now irrelevant, it probably also contains most of the theory we still need for this unit.
Computers did also lead to the development of new ideas in mathematics of finance, notably in stochastic modelling. That new material mostly falls in the more advanced units ACST306 and ACST307 rather than in this introductory unit.
While some topics in this unit mention Australian conventions and market features, the mathematical concepts in this unit are independent of any legislative constraints and so do not recognise national or planetary boundaries.
Any business that enters into long-term financial contracts needs staff with an understanding of compound interest. If the pricing structure of the business does not correctly allow for the effects of compound interest, that structure is unlikely to be sustainable in the long run.