2019-2020 / MQGE0007-1

Financial Mathematics and Stochastic Calculus

Duration

30h Th

Number of credits

 Master in economics : general (120 ECTS)5 crédits 
 Master in business engineering (120 ECTS)5 crédits 
 Master in mathematics (120 ECTS)5 crédits 
 Master in mathematics (60 ECTS)5 crédits 

Lecturer

Louis Esch

Language(s) of instruction

English language

Organisation and examination

Teaching in the second semester

Schedule

Schedule online

Units courses prerequisite and corequisite

Prerequisite or corequisite units are presented within each program

Learning unit contents

The bases of probability theory and stochastic processes are introduced. Then, two famiiles of applications are presented : - Continuious time stochastic finance (stochastic calculus, option pricing models, interest rate models) ; - Risk theory in non-life insurance (compound Poisson process, collective risk process, ruin probability, tarification principles).

Learning outcomes of the learning unit

- Give the rigorous mathematical bases of stochastic processes and stochastic calculus. - Apply these bases to some financial and actuarial models. Intended Learning Outcomes addressed by the course :

  • Strengthening knowledge and understanding of basic management disciplines in order to use them to perform a rigorous analysis of a management situation and provide pertinent solutions
  • Gaining the knowledge and understanding of the fields of financial engineering
  • Understanding and being capable of using modelization methods, applied to the financial field
  • Developing a transversal, global vision

Prerequisite knowledge and skills

- Basic probability theory ; - Financial securities (interest rates, derivatives).

Planned learning activities and teaching methods

Mode of delivery (face-to-face ; distance-learning)

face-to-face

Recommended or required readings

- KAAS R., GOOVAERTS M., DHAENE J., DENUIT M., Modern actuarial risk theory, Kluwers Academic Publishers, 2001. - KENNEDY D., Stochastic financial models, Chapman & Hall, 2010. - MIKOSCH T., Elementary stochastic calculus with finance in view, World Scientific, 1998. These readings are recommended, not required

Assessment methods and criteria

Written exam.

Work placement(s)

Organizational remarks

Contacts

Louis Esch HEC-Ecole de gestion de l'Université de Liège (bâtiment N1) Tél : 04/232.73.00 e-mail : louis.esch@ulg.ac.be

Adaptation of teaching commitments following the COVID-19 pandemic for the May-June 2020 session

Teaching methods implemented : distance-learning

Partly face to face - partly e-learning

Assessment subjects

See document on Lol@ (section Exam) : http://lola.hec.uliege.be/pluginfile.php/217791/mod_resource/content/1/Content%20exam%20FMSC%20June20_200420.pdf

Assessment methods

Written exam - Open questions - Online

Contacts

Adaptation of teaching commitments following the COVID-19 pandemic for the Aug-Sept 2020 session

Assessment subjects

Same content as for June session

Assessment methods

Same methods as for June session : written online exam on Lol@ (open questions)

Contacts

Items online

syllabus
slides