In this module, students will learn about various mathematical and statistical concepts that are important in social finance.

(LO1) Select an appropriate interest rate for a financial product with social outcomes

(LO2) Determine the price for social impact bonds and development impact bonds in a global context

(LO3) Apply risk optimization techniques to allocate resources efficiently in order to maximize social and financial returns

(LO4) Using appropriate software for analysis, identify an appropriate modeling framework and parameters to statistically assess hazards and estimate default probabilities

(LO5) Develop customized financial products to address the needs of underserved communities using statistical tests and the significance of model parameters from datasets

1) Basic Theory of Interest and Finance:
- Interest rates, discounting and compounding, internal rates of return for portfolios
- Introduction to financial market and financial products
- Pricing annuities and perpetuities in a social finance context

2) Pricing Social Finance Products:
Pricing and management of social impact bonds and development impact bonds
Case studies of existing products in the market

3) Optimization Models for Social Finance:
- Linear programming and applications
- Optimization of financial returns vs social returns
- Multi-objective optimization
- Case studies of resource optimization in social projects

4) Mathematics of Financial Inclusion:
- Basic concepts in survival analysis
- Non-parametric models in survival analysis
- Semiparametric and parametric models in survival analysis
- Case studies of impact of social factors in semiparametric and parametric models
- Case s tudies of probability of default for microloans