Financial economics is the discipline underlying all financial services. No matter what your area of specialty or your role in your organization, an understanding of financial economics is essential. As you will learn in this module, financial economics is the study of how individuals and institutions acquire, save, and invest money. These activities are fundamental to institutions and individuals. Thus, not only will this module help you be a more knowledgeable actuary, it will also help you with your personal financial planning.
This e–course is intended for:
- Individuals engaged in the actuarial profession and
- other professionals interested in or impacted by important topics related to the actuarial field.
After completing this e-course, you will be better able to:
- explain that financial economics has a world view (along with tools) for all actuaries;
- demonstrate a basic knowledge of utility theory;
- describe and discuss the assumptions of mean-variance portfolio theory and its principal results;
- describe asset pricing models and discuss the principal results, assumptions and limitations of such models;
- explain sources of empirical anomalies;
- explain stochastic models and the behavior of security prices;
- explain the properties of option prices, valuation methods and hedging techniques;
- explain how we may model the term structure of interest rates; and
- explain modern corporate finance.
The following books are resources that are referenced in the e–course. While these materials are not required for those taking the e–course for professional development, they are recommended to enhance the e–course learning experience:
- Investments (Seventh Edition). Bodie, Z., A. Kane, and A. Marcus. 2008. Irvin/McGraw–Hill.
- Investment Guarantees–Modeling and Risk Management for Equity–Linked Life Insurance. Hardy, M. 2003. John Wiley and Sons.
- Student Solutions Manual to Accompany Investments, Bodie, Z, A. Kane and A. Marcus. 2008, 7th Edition.
- Principles of Corporate Finance. (Eighth Edition) Brealey, R., S. Myers, and F. Allen. 2006. McGraw/Irwin.
- Financial Theory and Corporate Policy (Fourth Edition). Copeland, T., J.F. Weston, and K. Shastri. 2004. Addison–Wesley.
The SOA Continuing Professional Development (CPD) Requirement was effective on Jan. 1, 2009 and members must report compliance at the end of each CPD period. Members must meet the Basic Requirement provisions of Section B or one of the Alternative Compliance provisions of Section C of the SOA CPD Requirement in order to be deemed compliant.
This e–course may be suitable to meet the Basic Requirement provisions of Section B of the SOA CPD Requirement. This e–course may also be suitable to meet the provisions of an Alternative Compliance standard (please consult the appropriate standard). Ultimately, it is the member's responsibility to make a reasonable, good-faith determination as to whether a continuing education event meets the CPD Requirement.
Structured credit: This e–course offers 7.5 units SOA structured credit.
Unstructured credit: This is a self–study course and, therefore, SOA unstructured credit is determined by the member.