Financial Mathematics for Actuaries: Updated Edition

Financial Mathematics for Actuaries: Updated Edition is an introductory textbook on the mathematics of interest rates. It is written at a level of rigor required of students who major in actuarial science and prepares them for further analysis of financial instruments. This book emphasizes an intuitive treatment of the mathematics of finance and insurance, with a particular focus on applications. Students will find many illustrative examples that apply mathematical techniques to financial products and personal financial management.

For this latest updated edition, a whole section in the chapter on bond management has been revised, extended and placed under a new heading called Immunization Strategies.

Contents
About the Authors v
Preface to the Updated Edition vii
Preface to the 1st Edition ix
List of Mathematical Symbols xi

Chapter 1 Interest Accumulation and Time Value of Money 1
Chapter 2 Annuities 39
Chapter 3 Spot Rates, Forward Rates and the Term Structure 73
Chapter 4 Rates of Return 99
Chapter 5 Loans and Costs of Borrowing 141
Chapter 6 Bonds and Bond Pricing 181
Chapter 7 Bond Yields and the Term Structure 207
Chapter 8 Bond Management 239
Chapter 9 Stochastic Interest Rates 285
Appendix A Review of Mathematics and Statistics 307