ACTL2111 Financial Mathematics for Actuaries - 2023

Subject Code
Study Level
Commencing Term
Term 1
Total Units of Credit (UOC)
Delivery Mode
On Campus
Risk & Actuarial Studies

1. Course Details

Summary of Course

​This course develops the financial mathematics required for the analysis of financial transactions. Topics covered include: mathematics of compound interest; analysis and valuation of annuities, bonds, loans and other securities; yield curves and immunisation; introduction to stochastic interest rate models and actuarial applications.

Teaching Times and Locations

Please note that teaching times and locations are subject to change. Students are strongly advised to refer to the Class Timetable website for the most up-to-date teaching times and locations.

View course timetable

Course Policies & Support

Course Aims and Relationship to Other Courses

At the end of the course students should be able to:

  1. Explain how to evaluate, and assign a single value to a series of cash flows under different assumptions on the time value of money (interest);
  2. Understand and assess the principles underlying the evaluation of the main securities that are available in the financial markets;
  3. Demonstrate their ability to apply the technical skills related to the course in a practical context.

This course covers financial mathematics at an introductory level. The assumed knowledge of the course is a good understanding of mathematics as covered in a full year undergraduate program in Calculus and Linear Algebra.

ACTL2111 Financial Mathematics for Actuaries builds on the basic concepts of financial mathematics. Parts of the course will apply some of the concepts covered in ACTL2131 Probability and Mathematical Statistics. More advanced models are covered in ACTL2102 Foundations of Actuarial Models. The course is necessary knowledge for the more advanced coverage in ACTL3182 Asset-Liability and Derivative Models and is an introduction to the more extensive coverage in ACTL3151 Life Contingences.

Furthermore, students should be able to use a word processing package (such as WORD) and Excel spreadsheet. Knowledge of computational software (such as R, MATLAB, or MAPLE) is also recommended although not necessary.

2. Staff Contact Details

Position Title Name Email Location Phone Consultation Times
Lecturer-in-chargeAProfEric Cheung

​Lecturer's consultation times will be announced on the course website. The tutors will hold consultation before exam. Their consultation times will also be posted on the course Moodle website.

3. Learning and Teaching Activities

Use of your Webcam and Digital Devices: If you enrol in an online class, or the online stream of a hybrid class, teaching and associated activities will be conducted using Teams, Zoom, or similar a technology. Using a webcam is optional, but highly encouraged, as this will facilitate interaction with your peers and instructors. If you are worried about your personal space being observed during a class, we encourage you to blur your background or make use of a virtual background. Please contact the Lecturer-in-Charge if you have any questions or concerns.

Some courses may involve undertaking online exams for which your own computer or digital devices will be required. Monitoring of online examinations will be conducted directly by University staff and is bound by the University's privacy and security requirements. Any data collected will be handled accordance with UNSW policies and standards for data governance. For more information on how the University manages personal information please refer to the UNSW Student Privacy Statement and the UNSW Privacy Policy.

Approach to Learning and Teaching in the Course

The approach adopted in this course is one of assisted self-study—while reading this subsection, please refer to the detailed course schedule.

Course materials are broadly organised in 7 categories. They consist of:

  • Overview videos/videos on common mistakes for each module
  • Lecture recordings (available after each in-person lecture)
  • Fully annotated lecture slides (available after each in-person lecture)
  • Prescribed/reference books
  • Exercises with solutions
  • Selected past quizzes and exams for advanced exercises
  • Downloadable "R tutorials" (platform for students to use R to solve problems)
Lectures and the annotated slides are expected to be the most important for your learning, as these contain not only the fundamental concepts/theory, derivation of important results and some numerical examples but also intuition and big picture, while the exercises let you practice solving the related problems. During the weekly lecture, the LIC will go through the lecture slides in detail and provide further explanations and annotations, and students will also have the opportunity to ask questions on aspects of the course that need further clarification.

In each week, students are recommended to read the relevant sections of the prescribed books, watch a short overview video called "pre-module video" (if a new module is to begin), attend the lecture in person, attend the lab tutorials (weeks 1-5 and 7-8), and attempt the tutorial exercises prior to attending the tutorials. If a module ends in the week, students should watch the corresponding videos explaining some common mistakes/misconceptions (called "post-module videos"). The LIC also has weekly consultation hour (online) to answer students' questions.

In the tutorials, students have the chance to interact with the tutor and other students in the course. Students need to attempt the tutorial exercises prior to the tutorial classes and identify problems that require closer review during tutorials. They are an opportunity to learn from other students and to develop team skills by working on problems with other students.

Learning Activities and Teaching Strategies

​It is expected that students will take a pro-active approach to learning. Exercises are organised in an increasing level of difficulty and it is recommended to complete all the exercises of a subsection before attempting the exercises of the following subsection. It is expected that you will spend at least ten hours per week studying this course. In periods where you need to complete assignments or prepare for examinations, the workload may be greater. Over-commitment (to extra-curricular activities) has been a cause of failure for many students. You should take the required workload into account when planning how to balance study with employment and other activities. In the past, students have found the amount of contents particularly challenging. Don’t allow yourself to fall behind the schedule!

5. Course Resources


The required textbooks for the course are:

  • Broverman, S.A. (2015/2017), Mathematics of Investment and Credit, 6th/7th Edition, ACTEX Publications. [A solutions manual is available for purchase. The 5th Edition is still largely similar to the 6th and 7th Editions, so it is possible to learn with the 5th Edition as well. However, the 4th, 3rd and 2nd Editions are not recommended.]
  • Sherris, M. (1996), Money and Capital Markets, Pricing, Yields and Analysis, 2nd Edition, Allen & Unwin.

Additional (optional) readings are:

  • Daniel, J. W. and Vaaler, L. J. F. (2007), Mathematical Interest Theory, Pearson, Prentice Hall. [A book similar to Broverman’s, useful as a second reference if a second, different explanation is necessary. It also has the advantage of discussing the use of modern calculators and explaining how to use them.]
  • Boyle, P.P., Cox, S.H., Dufresne, D., Gerber, H.U., Mueller, H.H., Pedersen, H.W., Pliska, S.R., Sherris, M., Shiu, E.S., Tan, K.S. (2001) Financial Economics: With Applications to Investments, Insurance and Pensions, Harry H. Panjer Ed., The Actuarial Foundation, Schaumburg, Illinois. [An advanced textbook, perhaps a bit too advanced for the level of the course.]
  • Gerber, H.U. (1997), Life Insurance Mathematics, Springer-Verlag, 3rd Edition. [The absolute classic in Life Insurance Mathematics. Useful as an extremely concise optional reading. A new edition is not likely to appear in a near future.]
  • Bowers, N.L. Gerber, H.U., Hickman, J.C., Jones, D.A. and Nesbitt, C.J. (1997), Actuarial Mathematics, Society of Actuaries, 2nd Edition. [Another classic useful reference; a new edition is not likely to appear in a near future.]

All these books are available from the library, some of them with copies in the reserve.

Formulae & Tables

For closed book exams, students will only be allowed to bring into the examinations for the Actuarial courses in the Bachelor of Actuarial programme the text "Formulae and Tables for Actuarial Examinations". This text must not be annotated. All students in the actuarial courses should purchase a copy of this text if they wish to use this in the final examinations for this course. The text is available from the UNSW Bookshop or the UK Institute of Actuaries.

Course website

The course Moodle website is available from the UNSW TELT platform.

To access the Moodle online support site for students, follow the links from that website to UNSW Moodle Support/Support for Students. Additional technical support can be obtained from (02 9385 1333).

All course contents will be available from the course website. It is essential that you visit the site regularly (at least once in two days) to see any announcements posted there by the course coordinator, as it will be assumed that they are known to you within a reasonable time.

6. Course Evaluation & Development

Feedback is regularly sought from students and continual improvements are made based on this feedback. At the end of this course, you will be asked to complete the myExperience survey, which provides a key source of student evaluative feedback. Your input into this quality enhancement process is extremely valuable in assisting us to meet the needs of our students and provide an effective and enriching learning experience. The results of all surveys are carefully considered and do lead to action towards enhancing educational quality.

Each course in actuarial studies at UNSW is reviewed each session by the course co-ordinator using student evaluative feedback from myExperience. Student feedback is taken seriously, and continual improvements are made to the course based on such feedback. Significant changes to the course are communicated to students taking the course. Your input into improving future offerings of the course is highly valued.

Some of the additional developments have been effected in recent years include:

  • Replacement of an invigilated mid-term exam by two formative online quizzes;
  • Corrections of typos in the exercises and improvement of the solutions;
  • Enhancement of Excel lab materials;
  • Removal of the module on life contingencies;
  • Preparation of online videos to give student an overview (pre-module) on each module and some explanations on common mistakes/misconception (post-module);
  • Development of "R tutorials" for students to learn to use R to solve practical problems related to the course.

We repeat that we take students’ feedback extremely seriously and we count on your cooperation when seeking feedback that will help us identify the strengths and weaknesses of the course contents and learning and teaching strategies. We guarantee that the process is entirely anonymous and that your feedback will not have any impact on your final results.

7. Course Schedule

Note: for more information on the UNSW academic calendar and key dates including study period, exam, supplementary exam and result release, please visit:
Week Activity Topic Assessment/Other
Week 1:

Module 1 (Time Value of Money and Valuation of Cash Flows)

Week 2:

Module 1 (Time Value of Money and Valuation of Cash Flows)

Week 3:

Module 1 (Time Value of Money and Valuation of Cash Flows)

Week 4:

Module 1 (Time Value of Money and Valuation of Cash Flows)

Module 2 (Modelling Loans and Repayments)

Week 5:

Module 2 (Modelling Loans and Repayments)

Online quiz 1

Week 6:

Flexibility week (no activities)

Week 7:

Module 2 (Modelling Loans and Repayments)

Module 3 (Interest Rate Risk)

Week 8:

Module 3 (Interest Rate Risk)

Module 4 (Derivatives)

Assignment due (tentative)

Week 9:

Module 4 (Derivatives)

Guest lecture by industry partner tentatively scheduled

Week 10:

Module 4 (Derivatives)

Module 5 (Stochastic Returns)

Online quiz 2

8. Policies and Support

Information about UNSW Business School program learning outcomes, academic integrity, student responsibilities and student support services. For information regarding special consideration, supplementary exams and viewing final exam scripts, please go to the key policies and support page.

Program Learning Outcomes

The Business School places knowledge and capabilities at the core of its curriculum via seven Program Learning Outcomes (PLOs). These PLOs are systematically embedded and developed across the duration of all coursework programs in the Business School.

PLOs embody the knowledge, skills and capabilities that are taught, practised and assessed within each Business School program. They articulate what you should know and be able to do upon successful completion of your degree.

Upon graduation, you should have a high level of specialised business knowledge and capacity for responsible business thinking, underpinned by ethical professional practice. You should be able to harness, manage and communicate business information effectively and work collaboratively with others. You should be an experienced problem-solver and critical thinker, with a global perspective, cultural competence and the potential for innovative leadership.

All UNSW programs and courses are designed to assess the attainment of program and/or course level learning outcomes, as required by the UNSW Assessment Design Procedure. It is important that you become familiar with the Business School PLOs, as they constitute the framework which informs and shapes the components and assessments of the courses within your program of study.

PLO 1: Business knowledge

Students will make informed and effective selection and application of knowledge in a discipline or profession, in the contexts of local and global business.

PLO 2: Problem solving

Students will define and address business problems, and propose effective evidence-based solutions, through the application of rigorous analysis and critical thinking.

PLO 3: Business communication

Students will harness, manage and communicate business information effectively using multiple forms of communication across different channels.

PLO 4: Teamwork

Students will interact and collaborate effectively with others to achieve a common business purpose or fulfil a common business project, and reflect critically on the process and the outcomes.

PLO 5: Responsible business practice

Students will develop and be committed to responsible business thinking and approaches, which are underpinned by ethical professional practice and sustainability considerations.

PLO 6: Global and cultural competence

Students will be aware of business systems in the wider world and actively committed to recognise and respect the cultural norms, beliefs and values of others, and will apply this knowledge to interact, communicate and work effectively in diverse environments.

PLO 7: Leadership development

Students will develop the capacity to take initiative, encourage forward thinking and bring about innovation, while effectively influencing others to achieve desired results.

These PLOs relate to undergraduate and postgraduate coursework programs.  For PG Research PLOs, including Master of Pre-Doctoral Business Studies, please refer to the UNSW HDR Learning Outcomes

Business School course outlines provide detailed information for students on how the course learning outcomes, learning activities, and assessment/s contribute to the development of Program Learning Outcomes.

UNSW Graduate Capabilities

The Business School PLOs also incorporate UNSW graduate capabilities, a set of generic abilities and skills that all students are expected to achieve by graduation. These capabilities articulate the University’s institutional values, as well as future employer expectations.

UNSW Graduate CapabilitiesBusiness School PLOs
Scholars capable of independent and collaborative enquiry, rigorous in their analysis, critique and reflection, and able to innovate by applying their knowledge and skills to the solution of novel as well as routine problems.
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 7: Leadership development

Entrepreneurial leaders capable of initiating and embracing innovation and change, as well as engaging and enabling others to contribute to change
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 6: Global and cultural competence
  • PLO 7: Leadership development

Professionals capable of ethical, self-directed practice and independent lifelong learning
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 5: Responsible business practice

Global citizens who are culturally adept and capable of respecting diversity and acting in a socially just and responsible way.
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 5: Responsible business practice
  • PLO 6: Global and cultural competence

While our programs are designed to provide coverage of all PLOs and graduate capabilities, they also provide you with a great deal of choice and flexibility.  The Business School strongly advises you to choose a range of courses that assist your development against the seven PLOs and four graduate capabilities, and to keep a record of your achievements as part of your portfolio. You can use a portfolio as evidence in employment applications as well as a reference for work or further study. For support with selecting your courses contact the UNSW Business School Student Services team.

Academic Integrity and Plagiarism

Academic Integrity is honest and responsible scholarship. This form of ethical scholarship is highly valued at UNSW. Terms like Academic Integrity, misconduct, referencing, conventions, plagiarism, academic practices, citations and evidence based learning are all considered basic concepts that successful university students understand. Learning how to communicate original ideas, refer sources, work independently, and report results accurately and honestly are skills that you will be able to carry beyond your studies.

The definition of academic misconduct is broad. It covers practices such as cheating, copying and using another person’s work without appropriate acknowledgement. Incidents of academic misconduct may have serious consequences for students.


UNSW regards plagiarism as a form of academic misconduct. UNSW has very strict rules regarding plagiarism. Plagiarism at UNSW is using the words or ideas of others and passing them off as your own. All Schools in the Business School have a Student Ethics Officer who will investigate incidents of plagiarism and may result in a student’s name being placed on the Plagiarism and Student Misconduct Registers.

Below are examples of plagiarism including self-plagiarism:

Copying: Using the same or very similar words to the original text or idea without acknowledging the source or using quotation marks. This includes copying materials, ideas or concepts from a book, article, report or other written document, presentation, composition, artwork, design, drawing, circuitry, computer program or software, website, internet, other electronic resource, or another person's assignment, without appropriate acknowledgement of authorship.

Inappropriate Paraphrasing: Changing a few words and phrases while mostly retaining the original structure and/or progression of ideas of the original, and information without acknowledgement. This also applies in presentations where someone paraphrases another’s ideas or words without credit and to piecing together quotes and paraphrases into a new whole, without appropriate referencing.

Collusion: Presenting work as independent work when it has been produced in whole or part in collusion with other people. Collusion includes:

  • Students providing their work to another student before the due date, or for the purpose of them plagiarising at any time
  • Paying another person to perform an academic task and passing it off as your own
  • Stealing or acquiring another person’s academic work and copying it
  • Offering to complete another person’s work or seeking payment for completing academic work

Collusion should not be confused with academic collaboration (i.e., shared contribution towards a group task).

Inappropriate Citation: Citing sources which have not been read, without acknowledging the 'secondary' source from which knowledge of them has been obtained.

Self-Plagiarism: ‘Self-plagiarism’ occurs where an author republishes their own previously written work and presents it as new findings without referencing the earlier work, either in its entirety or partially. Self-plagiarism is also referred to as 'recycling', 'duplication', or 'multiple submissions of research findings' without disclosure. In the student context, self-plagiarism includes re-using parts of, or all of, a body of work that has already been submitted for assessment without proper citation.

To see if you understand plagiarism, do this short quiz:


The University also regards cheating as a form of academic misconduct. Cheating is knowingly submitting the work of others as their own and includes contract cheating (work produced by an external agent or third party that is submitted under the pretences of being a student’s original piece of work). Cheating is not acceptable at UNSW.

If you need to revise or clarify any terms associated with academic integrity you should explore the 'Working with Academic Integrity' self-paced lessons available at:

For UNSW policies, penalties, and information to help you avoid plagiarism see: as well as the guidelines in the online ELISE tutorials for all new UNSW students: For information on student conduct see:

For information on how to acknowledge your sources and reference correctly, see: If you are unsure what referencing style to use in this course, you should ask the lecturer in charge.

Student Responsibilities and Conduct

​Students are expected to be familiar with and adhere to university policies in relation to class attendance and general conduct and behaviour, including maintaining a safe, respectful environment; and to understand their obligations in relation to workload, assessment and keeping informed.

Information and policies on these topics can be found on the 'Managing your Program' website.


It is expected that you will spend at least ten to twelve hours per week studying for a course except for Summer Term courses which have a minimum weekly workload of twenty to twenty four hours. This time should be made up of reading, research, working on exercises and problems, online activities and attending classes. In periods where you need to complete assignments or prepare for examinations, the workload may be greater. Over-commitment has been a cause of failure for many students. You should take the required workload into account when planning how to balance study with employment and other activities.

We strongly encourage you to connect with your Moodle course websites in the first week of semester. Local and international research indicates that students who engage early and often with their course website are more likely to pass their course.

View more information on expected workload

Attendance and Engagement

Your regular attendance and active engagement in all scheduled classes and online learning activities is expected in this course. Failure to attend / engage in assessment tasks that are integrated into learning activities (e.g. class discussion, presentations) will be reflected in the marks for these assessable activities. The Business School may refuse final assessment to those students who attend less than 80% of scheduled classes where attendance and participation is required as part of the learning process (e.g. tutorials, flipped classroom sessions, seminars, labs, etc.). If you are not able to regularly attend classes, you should consult the relevant Course Authority.

View more information on attendance

General Conduct and Behaviour

You are expected to conduct yourself with consideration and respect for the needs of your fellow students and teaching staff. Conduct which unduly disrupts or interferes with a class, such as ringing or talking on mobile phones, is not acceptable and students may be asked to leave the class.

View more information on student conduct

Health and Safety

UNSW Policy requires each person to work safely and responsibly, in order to avoid personal injury and to protect the safety of others.

View more information on Health and Safety

Keeping Informed

You should take note of all announcements made in lectures, tutorials or on the course web site. From time to time, the University will send important announcements to your university e-mail address without providing you with a paper copy. You will be deemed to have received this information. It is also your responsibility to keep the University informed of all changes to your contact details.

Student Support and Resources

The University and the Business School provide a wide range of support services and resources for students, including:

Business School Learning Support Tools
Business School provides support a wide range of free resources and services to help students in-class and out-of-class, as well as online. These include:

  • Academic Communication Essentials – A range of academic communication workshops, modules and resources to assist you in developing your academic communication skills.
  • Learning consultations – Meet learning consultants who have expertise in business studies, literacy, numeracy and statistics, writing, referencing, and researching at university level.
  • PASS classes – Study sessions facilitated by students who have previously and successfully completed the course.
  • Educational Resource Access Scheme – To support the inclusion and success of students from equity groups enrolled at UNSW Sydney in first year undergraduate Business programs.

The Nucleus - Business School Student Services team
The Nucleus Student Services team provides advice and direction on all aspects of enrolment and graduation. Level 2, Main Library, Kensington 02 8936 7005 /

Business School Equity, Diversity and Inclusion
The Business School Equity, Diversity and Inclusion Committee strives to ensure that every student is empowered to have equal access to education. The Business School provides a vibrant, safe, and equitable environment for education, research, and engagement that embraces diversity and treats all people with dignity and respect.

UNSW Academic Skills
Resources and support – including workshops, individual consultations and a range of online resources – to help you develop and refine your academic skills. See their website for details.

Student Support Advisors
Student Support Advisors work with all students to promote the development of skills needed to succeed at university, whilst also providing personal support throughout the process.
John Goodsell Building, Ground Floor.
02 9385 4734

International Student Support
The International Student Experience Unit (ISEU) is the first point of contact for international students. ISEU staff are always here to help with personalised advice and information about all aspects of university life and life in Australia.
Advisors can support you with your student visa, health and wellbeing, making friends, accommodation and academic performance.
02 9385 4734

Equitable Learning Services
Equitable Learning Services (formerly Disability Support Services) is a free and confidential service that provides practical support to ensure that your health condition doesn't adversely affect your studies. Register with the service to receive educational adjustments.
Ground Floor, John Goodsell Building.
02 9385 4734

UNSW Counselling and Psychological Services
Provides support and services if you need help with your personal life, getting your academic life back on track or just want to know how to stay safe, including free, confidential counselling.
Level 2, East Wing, Quadrangle Building.
02 9385 5418

Library services and facilities for students
The UNSW Library offers a range of collections, services and facilities both on-campus and online.
Main Library, F21.
02 9065 9444

Moodle eLearning Support
Moodle is the University’s learning management system. You should ensure that you log into Moodle regularly.
02 9385 3331

UNSW IT provides support and services for students such as password access, email services, wireless services and technical support.
UNSW Library Annexe (Ground floor).
02 9385 1333

Support for Studying Online

The Business School and UNSW provide a wide range of tools, support and advice to help students achieve their online learning goals. 

The UNSW Guide to Online Study page provides guidance for students on how to make the most of online study.

We recognise that completing quizzes and exams online can be challenging for a number of reasons, including the possibility of technical glitches or lack of reliable internet. We recommend you review the Online Exam Preparation Checklist of things to prepare when sitting an online exam.