Organisation : Institute of Actuaries of India
Announcement : Syllabus
Stream : CT Core Technical Syllabus

Home Page : http://www.actuariesindia.org/index.aspx
Download Syllabus Here :
CT1 : http://www.indianjobtalks.com/uploads/76058-CT1.pdf
CT2 : http://www.indianjobtalks.com/uploads/76058-CT2.pdf
CT3 : http://www.indianjobtalks.com/uploads/76058-CT3.pdf
CT4 : http://www.indianjobtalks.com/uploads/76058-CT4.pdf
CT5 : http://www.indianjobtalks.com/uploads/76058-CT5.pdf
CT6 : http://www.indianjobtalks.com/uploads/76058-CT6.pdf
CT7 : http://www.indianjobtalks.com/uploads/76058-CT7.pdf
CT8 : http://www.indianjobtalks.com/uploads/76058-CT8.pdf
CT9 : http://www.indianjobtalks.com/uploads/76058-CT9.pdf

Core Technical Syllabus :
CT1 - Financial Mathematics Core Technical :
Aim :
The aim of the Financial Mathematics subject is to provide a grounding in financial mathematics and its simple applications.

Objectives :
On completion of the subject the trainee actuary will be able to :
I. Describe how to use a generalized cash flow model to describe financial transactions.
1. For a given cash flow process, state the inflows and outflows in each future time period and discuss whether the amount or the timing (or both) is fixed or uncertain.

2. Describe in the form of a cash flow model the operation of a zero coupon bond, a fixed interest security, an index-linked security, cash on deposit, an equity, an “interest only” loan, a repayment loan, and an annuity certain.

II. Describe how to take into account the time value of money using the concepts of compound interest and discounting.
1. Accumulate a single investment at a constant rate of interest under the operation of :
** simple interest
** compound interest

2. Define the present value of a future payment.
3. Discount a single investment under the operation of simple (commercial) discount at a constant rate of discount.
4. Describe how a compound interest model can be used to represent the effect of investing a sum of money over a period.

III. Show how interest rates or discount rates may be expressed in terms of different time periods.
1. Derive the relationship between the rates of interest and discount over one effective period arithmetically and by general reasoning.
2. Derive the relationships between the rate of interest payable once per effective period and the rate of interest payable p times per time period and the force of interest.

3. Explain the difference between nominal and effective rates of interest and derive effective rates from nominal rates.
4. Calculate the equivalent annual rate of interest implied by the accumulation of a sum of money over a specified period where the force of interest is a function of time.

IV. Demonstrate a knowledge and understanding of real and money interest rates.

V. Calculate the present value and the accumulated value of a stream of equal or unequal payments using specified rates of interest and the net present value at a real rate of interest, assuming a constant rate of inflation.
1. Discount and accumulate a sum of money or a series (possibly infinite) of cash flows to any point in time where :
** the rate of interest or discount is constant
** the rate of interest or discount varies with time but is not a continuous function of time
** either or both the rate of cash flow and the force of interest are continuous functions of time

2. Calculate the present value and accumulated value of a series of equal or unequal payments made at regular intervals under the operation of specified rates of interest where the first payment is :
** deferred for a period of time
** not deferred

VI. Define an equation of value.
1. Define an equation of value, where payment or receipt is certain.
2. Describe how an equation of value can be adjusted to allow for uncertain receipts or payments.
3. Understand the two conditions required for there to be an exact solution to an equation of value.

VII. Describe how a loan may be repaid by regular installments of interest and capital.
1. Describe flat rates and annual effective rates.
2. Calculate a schedule of repayments under a loan and identify the interest and capital components of annuity payments where the annuity is used to repay a loan for the case where annuity payments are made once per effective time period or p times per effective time period and identify the capital outstanding at any time.