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Actuarial Mathematics - MAT00044I

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  • Department: Mathematics
  • Module co-ordinator: Dr. Fabio Profumo
  • Credit value: 20 credits
  • Credit level: I
  • Academic year of delivery: 2023-24
    • See module specification for other years: 2024-25

Module summary

The module aims to present the basic notions and facts underlying Actuarial Science, thereby providing a foundation for further study of Actuarial Science.

Professional requirements

Counts towards IFoA exemption.

Related modules

Co-requisite modules

  • None

Prohibited combinations

  • None

Additional information

Introduction to Probability and Statistics

Module will run

Occurrence Teaching period
A Semester 1 2023-24

Module aims

The module introduces the basics of the mathematics used in actuarial models, as well as some basic financial and accounting tools such as present value of cash flows, annuities, and net present value. This module is the cornerstone for further development of specifically actuarial methods in later semesters.

Module learning outcomes

After successful completion of the module students are able to

• Describe some basic financial fixed income instruments;

• Explain the use of compound interest and discounting in determining the time value of money;

• Apply discounted cash flow techniques for investment project appraisal;

• Describe and analyse the term structure of interest rates.

Module content

We start by discussing some principles of mathematical modelling in actuarial settings. Then we introduce the idea of compounding and use it to value annuities and perpetuities. These ideas are then extended to introduce the concept of arbitrage, which is crucial in understanding prices of forward contracts. Incidentally, these ideas are also used in project valuation, as you will see. Finally, all these tools will be used to model and analyse models that describe the term structure of interest rates.


Task Length % of module mark
Closed/in-person Exam (Centrally scheduled)
Actuarial Mathematics
3 hours 80
Intermediate Assignment
Excel-based assignment
N/A 20

Special assessment rules



Task Length % of module mark
Closed/in-person Exam (Centrally scheduled)
Actuarial Mathematics
3 hours 80
Intermediate Assignment
Excel-based assignment
N/A 20

Module feedback

Current Department policy on feedback is available in the student handbook. Coursework and examinations will be marked and returned in accordance with this policy.

Indicative reading

  • Actuarial mathematics. Bowers, N. L.; Gerber, H. U.; Hickman, J, C. et al. 2nd ed., Society of Actuaries, 1997. ISBN: 9780938959465.

  • An introduction to the mathematics of finance. McCutcheon, J. J.; Scott, W. F. Heinemann, 1986. ISBN: 9780434912285.

  • Mathematics of compound interest. Butcher, M. V.; Nesbitt, C. J. Ulrich's Books, 1971. ISBN: 9780960300013.

  • Theory of financial decision making. Ingersoll, J. E. Rowman & Littlefield, 1987. ISBN: 9780847673599.

  • The theory of interest. Kellison, S. G. 3rd ed. Irwin, 2008. ISBN: 9780073382449.

  • Life insurance mathematics. Gerber, H. U. 3rd ed. Springer; Swiss Association of Actuaries, 1997. ISBN: 9783540622420.

The information on this page is indicative of the module that is currently on offer. The University is constantly exploring ways to enhance and improve its degree programmes and therefore reserves the right to make variations to the content and method of delivery of modules, and to discontinue modules, if such action is reasonably considered to be necessary by the University. Where appropriate, the University will notify and consult with affected students in advance about any changes that are required in line with the University's policy on the Approval of Modifications to Existing Taught Programmes of Study.