This curricular unit aims to give students a broad view of the importance of Financial Calculus for a correct investment decision of financial resources, through the presentation of the fundamental concepts of Mathematics and Financial Calculus, and the subsequent resolution of exercises applied to concrete situations of financial life.
Objectives and expected learning outcomes
Students are supposed to:
a) Understand and apply the concepts of capitalization, discount, annuities, and fees, and also acquire general and specific knowledge of loan repayment and its application to financial products (bonds, issuance of sovereign debt, corporate issues and close figures).
b) Understand these concepts, either to examine different investment alternatives, as to study different options in the use of credit, aspects that are of importance at a time of increased proliferation of financial products and services.
c) Develop critical reasoning of real life situations when offering financial products, provided by the bases that allow us to understand the techniques used in the development of these products.
d) Acquire knowledge and eminently practical skills, valuing the future exercise of their professional activity
e) Understand a few of the financial transactions carried out in business, as well as the design and analysis of investment strategies and funding.
Skills to be developed
To create and develop skills that allow:
a) the numerical skill and quantitative abilities, including data analysis, interpretation, and extrapolation, with the development of logically consistent reasoning;
b) the reading and comprehension of articles of economic and corporate character;
c) the development of logical, critical and analytical thinking in a creative manner;
d) the ability to discuss the multiple dimensions of corporate phenomena;
e) the correct application of the terminology and language of the economic, corporate and accounting phenomena;
f) the application of mathematical and statistical formulations in the analysis of economical-corporate phenomena
g) to execute calculations, based on the numerical data obtained from external or internal sources of corporations;
h) the knowledge of the policy in financial loans, active or passive, in short, medium and long term;
i) the elaboration of performance reports of real financial cost, real interest rates, deadlines, etc.
Programme
1. Introduction
1.1. General framework
1.2. Fundamental concepts
1.3. Basic principles
2. Capitalization Regimes
2.1. General concepts
2.2. Simple interest regime
2.3. Compound interest regime
3. Interest rates
3.1. Framework
3.2. Equivalent interest rates and proportional interest rates
3.3. Effective interest rates and nominal interest rates
3.4. Gross interest rates and net interest rates
3.5. Current interest rates and real interest rates
4. Discounting
4.1. Discounting concept
4.2. Discount on a simple interest rate
4.3. Discount on compound interest rate
4.4. Effective discounting cost
5. Capital Equivalence
5.1. Equation of value
5.2. Common capital
5.3. Common maturity
5.4. Average maturity
6. Annuities
6.1. Concept and classification
6.2. Annuity calculation
6.3. Finite and constant annuities
6.4. Finite and floating annuities
6.5. Perpetual and constant annuities
6.6. Financial Leasing
7. Amortization of loans
7.1. Concept and classification
7.2. Amortization systems with full reimbursement
7.3. Amortization systems with periodic repayment
Demonstration of the syllabus coherence with the curricular unit's learning objectives
Chapters 1 and 2 are intended to instill in the student the different modes of capitalization and their implication in the associated gains / losses.
Chapter 3 will allow us to develop a critical spirit in the questioning of the real situations of supply of financial products, by the bases provided that allow to understand the techniques used in the development of financial products.
Chapters 4 and 5 will address areas of major importance at a time of proliferation of financial products and services.
Chapters 6 and 7 will clarify general and special options for the amortization of financing and their application to financial products.
Main literature
MATIAS, Rogério;Cálculo Financeiro. Teoria e Prática, Escolar Editora, 2015
Supplementary Bibliography
Coelho, Luís Filipe; Coelho, Miguel Teixeira;Cálculo Financeiro - Manual para Entender os Princípios do Cálculo Financeiro Volume II: Do cálculo de rendas à amortização de empréstimos ordinários, Quid Juris, 2017
Coelho, Luís Filipe; Coelho, Miguel Teixeira;Cálculo Financeiro - Manual para Entender os Princípios do Cálculo Financeiro. Volume I: Do Regime de Juros à Equação de Valor, Quid Juris, 2017
Learning Methods
The exposure of the learning material, where audiovisual methods of presentation will be used whenever possible, will be divided in two parts:
a) a theoretical component, with the presentation of concepts, using examples of direct application on the concerned area, in order to show relevance of the program contents
b) a practical component, with the presentation and solving of exercises designed for financial calculus, focusing on real and present problems, giving the student the task to select the most fitting method to solve the problem, with the objective of developing taste and interest on the course unit contents, and to show its utility on real life situations.
Assessment Components
Avaliação distribuída com exame final
Assessment Components
Description
Type
Time (hours)
Conclusion Date
Attendance (estimated)
Lessons
45
Teste/Exame
4
Study
99
Projectos
12
Total:
160
Continuous Assessment
Two individual written tests (weighing 80%: each test has a 40% weighting) and resolution of a practical worksheet (with a weight of 20% in the assessment).
Under the terms of the Bachelor's Regulation:
1. The students' attendance in classes will be recorded and, if the number of absences per student exceeds 30% of the total number of lessons scheduled for each course unit, the student will be automatically transferred to the final evaluation (regular season).
2. In the written tests and other assessment elements mentioned in paragraph 2 of Art. 39 it is necessary to obtain a minimum grade of 7.5 (seven point five) points.
3. If the student misses a test or receives a grade lower than 7.5 points in the tests or in another assessment element mentioned in the previous number, the student will be automatically transferred to the final evaluation (regular season).
4. If the student misses or obtains less than 7.5 in the second written test, held in the same date of the final exam in the regular season, they may apply for further evaluation in the Appeal season.
Final Exam
Final exame for 100%
Demonstration of the coherence between the teaching methodologies and the learning outcomes
Cognitive skills are developed through exposure and discussion in problem solving, but also in individual problem solving. The skills of sharing and teamwork are developed in supervised group work. Communication skills are acquired throughout the UC.