AMS 318
Sample Exam, Fall 2014
Oct 13 2014
Instructions:
1. You have 1 hours 30 minutes to do the exam.
2. There are 4 questions with a total of 100 points and 1 bonus question with 10 points.
3. The exam is closed book but you are allowed to have a calcu
AMS 318
Prepared by Mu Tian
October 8, 2014
Homework #5
Due: Wednesday, October 8, at the end of class
* Please submit your solution with detailed steps
1. Annual end-of-year deposits are made to a fund paying an annual eective rate of interest
of 6%. The
AMS 318
Prepared by Mu Tian
September 18, 2014
Homework #3
Due: Wednesday, September 24, at the end of class
* Please submit your solution with detailed steps
1. Rafael opens a savings account with a deposit of $1500. He deposits $500 one year later
and $
AMS 318
Prepared by Mu Tian
November 7, 2014
Homework #8
Due: Wednesday, November 19, at the end of class
* Please submit your solution with detailed steps
1. A $ 1000 bond with a coupon rate of 8% has quarterly coupons and is redeemable after
an unspecie
AMS 318
Prepared by Mu Tian
November 6, 2014
Homework #8
Due: Wednesday, November 12, at the end of class
* Please submit your solution with detailed steps
1. A $ 1000 bond with a coupon rate of 8% has quarterly coupons and is redeemable after
an unspecie
AMS 318
Prepared by Mu Tian
September 17, 2014
Homework #3
Due: Wednesday, September 24, at the end of class
* Please submit your solution with detailed steps
1. Rafael opens a savings account with a deposit of $1500. He deposits $500 one year later
and $
AMS 318
Prepared by Mu Tian
September 10, 2014
Homework #2
Due: Wednesday, September 17, at the end of class
* Please submit your solution with detailed steps
1. The annual eective interest rate on Rogelios loan is 6.6%. What is the equivalent
nominal dis
A Basic Course in the Theory of Interest and
Derivatives Markets:
A Preparation for the Actuarial Exam FM/2
Marcel B. Finan
Arkansas Tech University
c All Rights Reserved
Preliminary Draft
Last updated
March 7, 2015
2
In memory of my parents
August 1, 200
AMS 318
Prepared by Mu Tian
August 27, 2014
Homework #1
Due: Wednesday, September 3rd, at the end of class
* Please submit your solution with detailed steps
1. Suppose a(t) = t2 + t + . If $100 invested at time 0 accumulates to $152 at time 4
and $200 inv
Second Edition
MATHEMATICAL INTEREST THEORY
Leslie Jane Federer Vaaler & James W. Daniel
MAA
Susan Staples, Texas Christian University
Mathematical Interest Theory includes more than 240 carefully worked examples.
There are over 430 problems, and numerica
Chapter 3 (Part 2)
Example 1
A loan of $100,000 borrowed at 6% annual effective is repaid by level
monthly payments in advance over the next 30 year. After 10 years, the
outstanding balance of the loan is refinanced at 4% annual effective and
is paid by l
AMS 318 Name:
Fall 2013 TEST 1 SBU ID:
Instructions: There are 100 total points. You have to show your work to receive credit.
There are 7 problems and you are responsible for checking that your exam is complete.
1. (15 points) Let a(t) = 1 + 0.02t2
(a) W
AMS 318 Name:
Fall 2013 Test 2 SBU-ID:
Instructions: There are 100 total points. You have to show your work to receive credit. There
are 7 problems and you are responsible for checking that your exam is complete.
1. (10 points) You accept a loan of $150,0
AMS 318 HW 1
October 10, 2012
1.3.3
(t) = t2 + .01t + (0) =
Since (t) is an accumulation function, (0) = 1. Hence = 1.
The interest rate i1 for the rst year is 2%. The formula for i1 is: i1 =
(1) (0)
= (1) 1. So (1) 1 = 0.02 or (1) = 1.02. It follows tha
AMS 318 hw6
1. 3.6.3
Overall, there are 15 12 = 180 payments, the last 10 12 = 120 are made when the annual eective rate
1
is 6%. The corresponding monthly eective interest rate is j = (1.06) 12 1 = 0.486755%. The level end-ofmonth payment is $1,692. When
AMS 318 HW 5
October 10, 2012
3.3.4
Time line: From t = 0 until t = 29 he deposit $1200 every year. Interest rate
is i = 0.05. From t = 30 until t = 49 he withdraws Q every years. Interest
rate is i = 0.04. At t = 49 he exhausts his saving.
*Note: Since h
Financial Mathematics
for Actuaries
Chapter 1
Interest Accumulation and
Time Value of Money
1
Learning Objectives
1. Basic principles in calculation of interest accumulation
2. Simple and compound interest
3. Frequency of compounding
4. Eective rate of in
THE
THEORY
OF
INTEREST
Second Edition
STEPHEN G. KELLISON
Study Notes Prepared by
Kevin Shand, FSA, FCIA
Assistant Professor
Warren Centre for Actuarial
Studies and Research
Contents
1 The
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
Measurement of Inter
Chapter 3
Annuities
Annuities immediate/due
Annuities with constant/geometric/arithmetic sequence of payment
Annuities symbols
Annuities
32
Introduction
An annuity is a series of payments made at specied intervals for a xed or
contingent period.
Payme
AMS 318
Prepared by Mu Tian
October 31, 2014
Homework #7
Due: Wednesday, November 5, at the end of class
* Please submit your solution with detailed steps
1. A 2500 6.5% eight-year bond has annual coupons. If it is purchased for 2590, the investor
will an
Chapter 9
Stocks and Financial Market
Common and prepared stocks
Brokerage accounts
Buying long
Selling short
Derivatives
Stocks and Financial Market
92
Common and Preferred Stocks
Corporations issue stocks to raise money.
Dierence between bonds an
Chapter 3
Example 1 (SOA May 2002 EA-1 #11)
S1 = The accumulated value as of 12/31/2002 of $500 invested at the
end of each month during 2002 at a nominal interest rate of 8%
per year, convertible quarterly.
A1 = The present value as of 1/1/2002 of S1, at
Chapter 1~2
Example 1.
Your $100 deposit grows under the following force of interest:
( t )=
2 0 t 5
cfw_5 +0.3
%t t>5
Calculate
(1) Your account value after 10 years.
(2) The equivalent simple interest you have earned during the 10 years.
(3) The equiva
AMS 318
Prepared by Mu Tian
August 27, 2014
Homework #1
Due: Wednesday, September 3rd, at the end of class
* Please submit your solution with detailed steps
1. Suppose a(t) = t2 + t + . If $100 invested at time 0 accumulates to $152 at time 4
and $200 inv
AMS 318
Prepared by Mu Tian
September 10, 2014
Homework #2
Due: Wednesday, September 17, at the end of class
* Please submit your solution with detailed steps
1. The annual eective interest rate on Rogelios loan is 6.6%. What is the equivalent
nominal dis
AMS 318
Prepared by Mu Tian
October 8, 2014
Homework #6
Due: Wednesday, October 15, at the end of class
* Please submit your solution with detailed steps
1. Copy and complete the following amortization table. Be careful to note that there is no
payment at
SOA for Chapter 6
Example 1
Bond A
Bond B
Face amount
$100
$100
Coupons
7% payable semiannually
4% payable semiannually
Redemption
100% par
150% par
Term to maturity
10 years
10 years
Bond A and Bond B have the same yield to maturity and sells at the same