Financial Mathematics

Module code: MA4071

Quantitative finance is widely recognised as a rapidly expanding market for mathematical and scientific skills. Financial Mathematics is the application of advanced mathematical methods to financial markets and financial management. It is also an interesting mathematical theory that has gained international recognition, including the 1997 Nobel prize in economics awarded to R. Merton and M. Scholes for the Black-Scholes formula published in 1973. This module will introduce financial market instruments and models, including options, binomial tree models, Stochastic calculus, Black-Scholes equation, Monte-Carlo simulations, mean-variance optimisation and capital asset pricing models. It will also introduce the fundamentals of modern probability theory and demonstrate the role of probability theory in modelling real world problems.