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Teaching of financial mathematics using Maple

Teaching of financial mathematics using Maple. Roman HAŠEK, Vladimíra PETRÁŠKOVA University of South Bohemia in České Budějovice, Pedagogical Faculty The Czech Republic. Aim of the contribution. To present first results of our project “Multimedia tool for teaching of financial mathematics”.

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Teaching of financial mathematics using Maple

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  1. Teaching of financial mathematics using Maple Roman HAŠEK, Vladimíra PETRÁŠKOVA University of South Bohemia in České Budějovice, Pedagogical Faculty The Czech Republic

  2. Aim of the contribution To present first results of our project “Multimedia tool for teaching of financial mathematics”

  3. Motivation To help our students to understand the core of basic concepts of financial mathematics and to be in touch with the newest financial products.

  4. Financial mathematics at our university 1) Special Bc. studying program “Financial mathematics” which prepares students to work in financial branch. 2) Studying program “Teaching of mathematics at grammar and secondary school” (In the Czech Republic financial mathematics is included in curricula of both grammar and secondary schools. Like an up todate application of arithmetic and geometric progression).

  5. Our experience with teaching of FM Basic concepts - Simple interest,compoundinterest, efficient interest rate - Savings - Credits: Mortgage credit, consumer lending, credit card - Notes - Bonds, Stocks Our experience: Most of these concepts of financial mathematics are difficult to understand for students.

  6. Our decision • To prepare a tool which enables students deeper insight into • the basic concepts of FM. • Demands: • interactivity • topicality • openness • Solution: • Interactive web page (http// www.pf.jcu.cz/~fim) with examples solved in Maple. Each of examples is (will be) accompanied with links to corresponding Maple document, Maplet and a file with the Maple code of solution.

  7. Use of the Maple software • Advantages • point and click mathematics enables to do own experiments • without familiarity with syntax • Maplets focused on particular quality • Numerical solution of more complicated tasks • - our university has the multiple licence of Maple • Disadvantages • Maplets run only on a computer with the Maple instalation

  8. Example – Bonds • Selection of tasks should respect the next rule: • “We should not use the Maple software to routine computing. • We expect some benefits in deeper understanding the subject.” • EXAMPLE: The bond with maturity term 10 years, face value • 1000 EUR and coupon rate 10% was purchased for the price of • 900 EUR. • - Calculate duration of this bond. • - Estimate a change in the bond price corresponding with • an increase in redemption yield until maturity of bond by 3%.

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