FM102      Half Unit
Quantitative Methods for Finance

This information is for the 2025/26 session.

Course Convenor

Manav Chaudhary

Availability

This course is compulsory on the BSc in Finance. This course is not available as an outside option to students on other programmes. This course is not available to General Course students.

This course is not available for auditing students.

Course content

The main aim of this course is to help students connect the mathematical tools that they have acquired in previous courses, including MA108, with the economics and financial models that they will be covering in their subsequent courses. Additional mathematical tools will be covered as well. All mathematical material will be covered in the context of economic and financial models.


The mathematical material covered includes (i) linear algebra, vector spaces, matrices, eigenvalues and eigenvectors, (ii) derivatives, integrals, partial derivatives, and implicit functions, (iii) unconstrained and constrained optimization, (iv) probability distributions, conditional probability, expectation and regression, (v) stochastic calculus, Ito processes and Ito’s lemma, and (vi) differential equations and partial differential equations.


The economics and financial models covered include (i) expectation and present value of uncertain cashflows, (ii) pricing of government bonds and other fixed-income securities, (iii) pricing of options and other derivatives, (iv) utility maximization and portfolio choice, (v) financing decisions by firms, and (vi) trading games between agents with public or private information.

Teaching

33 hours of seminars in the Winter Term.

This course is taught in the interactive lecturing format. There is no distinction between lectures and classes/seminars; there are “sessions” only, and the pedagogical approach in each session is interactive.

Formative assessment

Weekly homework assignments.

 

Indicative reading

Mathematics for economists, Carl Simon and Lawrence Blume, W.W. Norton & Company, International Student Edition.

Assessment

Continuous assessment (100%)


Key facts

Department: Finance

Course Study Period: Winter Term

Unit value: Half unit

FHEQ Level: Level 4

CEFR Level: Null

Total students 2024/25: 56

Average class size 2024/25: 56

Capped 2024/25: No
Guidelines for interpreting course guide information

Course selection videos

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Personal development skills

  • Problem solving
  • Application of numeracy skills
  • Specialist skills