Course 2025-2026 a.y.

• Accumulation and discount; present value and final value of a cash flow.
• Loan repayment, the cost of financing.
• Fixed income bond valuation, the rate of return of an investment.
• The term structure of interest rates.
• Cash flow duration and immunization.
• Project evaluation using Net Present Value and some extensions.
• Introduction to the one-period binomial model for European option valuation.
• Decisions under uncertainty: decision trees.

• Identify mathematical and financial tools for solving corporate problems.
• Explain the principles of loan repayment.
• Describe the main characteristics of fixed income bonds.
• Discuss the profitability of a financial project.
• Evaluate and take decisions under uncertainty.

• Use the basic mathematical and financial tools to assess corporate activities (accumulation, discount).
• Analyse the rate of return of an investment and the cost of financing.
• Formalising a problem under conditions of uncertainty.

• Lectures
• Practical Exercises
• Collaborative Works / Assignments

Teaching and learning activities of this course include, in addition to face-to-face lectures, the solution of exercises and the assignment of a group work. Those exercises allow students to apply the concepts illustrated during the course and assess their understanding through two quizzes and through four class discussion activities. Moreover stylized cases are proposed to students as group assignment and discussed in class with the purpose of interpreting real applications using the models explained during the course. Students are encouraged to attend the course on a regular basis.

Attending students

With the purpose of measuring the acquisition of the above-mentioned learning outcomes, the primary method of assessment for this course is a combination of a written examination, group homework and  individual quizzes. The final grade is equal to the weighted average 20% quiz + 80% final exam:

1. Three quizzes (20% of the final grade) with closed-ended questions. These quizzes must be worked on independently with the support of notes or textbooks, and are aimed to test the ability to recognize basic knowledge and concepts regarding financial calculus. The score granted with quizzes is valid for the whole academic year.
2. Written modality - exam (80% of the final grade), consisting in a mixture of problems/questions, aimed  to assess students’ ability to apply the analytical tools illustrated during the course. This exam must be worked on independently.    

Furthermore, students have the possibility to discount a two-point question from the written examination if they attend three out of four class activities (Activities calendar will be provided in the course syllabus).

Not-attending students

Students’ assessment are based on a written exam consisting of a mixture of problems/questions  regarding the whole course syllabus. The final grade is equal to the mark granted in this final exam. This exam must be worked on independently. 

Remark: students undertaking both quizzes and the group work can decide to take the exam as non-attending when registering for the exam.

• E. CASTAGNOLI, M. CIGOLA, L. PECCATI, Financial Calculus with Applications, Milano, EGEA, 2013.
• G. GURIOLI, Introduction to the Valuation of Investments, Milano, 2009 (PDF available on Bboard).

• S.A. BROWERMAN, Mathematics of Investment and Credit, ACTEX, Winsted CT, 2015, 6th Ed.(ISBN: 978-1-62542-485-3).
• D. FEIN, S. VENTURINI, E. POLI, E. BORGONOVO, Principles of Business analytics, Bocconi University Press, 2024.