# Theory of Interest

Theory of Interest
Theory of interest, annuities, amortization, financial derivatives. Prepares for SOA Exam FM.
STAT
274
 Hours 3.0 Credit, 3.0 Lecture, 0.0 Lab Prerequisites MATH 112 Recommended Pass SOA Exam P. Taught Fall, Winter Programs Containing STAT 274
Course Outcomes

### Exam FM

The primary learning outcome of this course is to prepare students for Exam FM offered by the Society of Actuaries

### Time Value of Money

Recognize, understand, and compute problems relating to time value of money, including simple and compound interest, present and future value, and nominal and effective rates of interest

### Annuity

Recognize, understand, and compute problems relating to annuities with payments that are not contingent, including annuity-immediate, annuity-due, perpetuity, and arithmetic or geometric increasing payment annuity

### Loans

Recognize, understand, and compute problems relating to loans, including principal, interest, term of loan, outstanding balance, final payment, amortization, and sinking fund

### Bonds

Recognize, understand, and compute problems relating to bonds, including price, redemption value, par value, coupon and coupon rate, yield rate, callable and non-callable, and accumulation of discount

### General Cash Flow

Recognize, understand, and compute problems relating to general cash flows and portfolios, including yield rate and rate of return, current value, convexity, yield curve, and stock price and dividend

### Immunization

Recognize, understand, and compute problems relating to immunization, including cash ï¬?ow matching, full immunization, and Redington immu­nization

### General Derivatives

Recognize, understand, and compute problems relating to general derivatives, including derivatives, ask and bid price, short selling, stock index, spot price, credit risk, and margin