Introduction to Financial Mathematics
Financial mathematics is the application of mathematical methods to financial problems. It involves the use of mathematical models and statistical techniques to understand and analyze financial markets, securities, and other financial instruments. Some key concepts in financial mathematics include risk management, derivatives pricing, portfolio optimization, and interest rate modeling.
Introduction to financial mathematics typically covers the basic mathematical tools used in the field, including probability theory, calculus, and linear algebra. It also covers the main financial concepts such as interest rates, bonds, stocks, options, and derivatives. Additionally, it introduces the students to the basic financial models used in the industry such as Black-Scholes, Binomial tree, and Interest Rate models.
Financial mathematics is a growing field with many applications in finance and economics. It is used by financial institutions, investment firms, and government agencies to make informed decisions and better understand the behavior of financial markets.