(LO1) To understand and calculate all kinds of rates of interest, find the future value and present value of a cash flow and to write the equation of value given a set of cash flows and an interest rate.
(LO2) To derive formulae for all kinds of annuities.
(LO3) To understand an annuity with level payments, immediate (or due), payable m-thly, (or payable continuously) and any three of present value, future value, interest rate, payment, and term of annuity as well as to calculate the remaining two items.
(LO4) To calculate the outstanding balance at any point in time.
(LO5) To calculate a schedule of repayments under a loan and identify the interest and capital components in a given payment.
(LO6) To calculate a missing quantity, being given all but one quantities, in a sinking fund arrangement.
(LO7) To calculate the present value of payments from a fixed interest security, bounds for the present value of a redeemable fixed interest security.
(LO8) Given the price, to calculate the running yield and redemption yield from a fixed interest security.
(LO9) To calculate the present value or real yield from an index-linked bond.
(LO10) To calculate the price of, or yield from, a fixed interest security where the income tax and capital gains tax are implemented.
(LO11) To calculate yield rate, the dollar-weighted and time weighted rate of return, the duration and convexity of a set of cash flows.
(S2) Problem solving skills
(S4) Commercial awareness