Financial Mathematics Preparation Course


The Financial Mathematics Preparation Course is designed to provide potential students in the Financial Mathematics Master of Science Program with the necessary mathematical background. There are no admissions criteria and the program does not lead to a degree. Successful completion of the Preparation Course is not a guarantee for admission into the Master's program.

The course meets every Tuesday 5-7pm in Eckhart 202, starting on September 28th, and runs for the entire academic year. The cost of the course is $7500.

The course outline for the Preparation Course is available here:

Preparation Course Outline


 Lecture 1, Sept. 28, 2004

Calculus: The Real numbers
Linear Algebra: Vector spaces, Linear combinations, linear dependence and indepence

Calculus Notes 1
Linear Algebra Notes 1

Solutions to Home Work 1


 

Lecture 2, Oct. 5, 2004

 

Calculus: Cauchy sequences, completeness
Linear Algebra: More vectorspaces

 

Calculus Notes 2

 


 

Lecture 3, Oct. 12, 2004

 

Calculus: Completeness of the real numbers, sup and inf.

Linear Algebra: Existence of a basis of a subspace, dimension.

 

No new notes this week.

 

Solutions to Home Work 2


 

Lecture 4, Oct. 19, 2004

 

Calculus: Functions, continuity
Linear Algebra: Bases and dimension

 

Calculus Notes 3

 

Solutions to Homework 3


 

Lecture 5, Oct. 26, 2004

 

Calculus: Maxima and Minima, Compactness
Linear Algebra: The dimension formula for linear transformations

 

Calculus Notes 4

 

Solutions to Homework 4

 


 

Lecture 6, Nov. 2, 2004

 

Calculus: Differentiable functions
Linear Algebra: Matrices and linear maps, Gaussian reduction

Calculus Notes 5

 

Solutions to Homework 5

 


 

Lecture 7, Nov. 9, 2004

 

Calculus: The Mean Value Theorem for Differentiable Functions
Linear Algebra: Reduced Row Echelon Form of a Matrix

Calculus Notes 6

 

Solutions to Homework 6

 


 

Lecture 8, Nov 16, 2004

 

Calculus: Integration
Linear Algebra: Determinants

 

Calculus Notes 7
Linear Algebra Notes

 

Solutions to Homework 7


 

No Lecture Nov 23, 2004

 


 

Lecture 9, Nov. 30, 2004

 

Calculus: The First Fundamental Theorem of Calculus
Linear Algebra: More Determinants

 

Calculus Notes 8

 

Solutions to Homework 8

 

Rules for computing determinants


 

Lecture 10, Dec. 7, 2004

 

Calculus: The Log and exp functions, the chain rule

Linear Algebra: Computing Determinants

 

Calculus Notes 9

 

Solutions to Homework 9


 

Lecture 11, Dec. 14, 2004

 

Calculus: The Trigonometric functions, the Gamma function

Linear Algebra: Eigenvalues

 

Calculus Notes 10
Linear Algebra Notes 3

 

Solutions to Homework 10

 


 

Lecture 12, Dec. 21, 2004

 

Calculus: Infinite Series
Linear Algebra: Eigenvectors

 

Calculus Notes 11

 

Solutions to Homework 11

 


 

Lecture 13, Jan. 11, 2005

 

Calculus: Infinite series, Power series
Linear Algebra: Orthogonality

 

Calculus Notes 12

 

 


 

Lecture 14, Jan. 18, 2005

 

Calculus: Taylor Series

Linear Algebra: Orthogonal Bases

 

Calculus Notes 13

 

 


 

Lecture 15, Feb. 1, 2005

 

Calculus: We will finish the notes on Power Series and the notes on Taylor Series

Linear Algebra: Orthogonal Subspaces and Orthonormal Bases

 

No new notes this week

 

Solutions to Homework 12 and 13

 


 

Lecture 16, Feb. 8, 2005

 

Calculus: More Taylor series, the Lagrange Remainder Term
Linear Algebra: Existence of eigenvectors for a symmetric matrix.

 

Calculus Notes 14

 

Solutions to Homework 14

 


 

Lecture 17, Feb. 15, 2005

 

Calculus: The Complex Numbers

Linear Algebra: The Singular Value Decomposition

 

Calculus Notes 15

Linear Algebra Notes

 

Solutions to Homework 15

 


 

Lecture 18, Feb. 22, 2005

 

Calculus: Complex Power Series

Linear Algebra: The QR-Decomposition

 

Calculus Notes 16
Linear Algebra Notes

 

Solutions to Homework 16

 


 

Lecture 19, Mar. 1, 2005

 

Calculus: Functions of Several Variables

Linear Algebra: Orthogonal Projections

 

Calculus Notes 17
Linear Algebra Notes

 

Solutions to Homework 17

 


 

Lecture 20, Mar. 8, 2005

 

Calculus: Approximating a function by a linear function

Linear Algebra: One Period Market Model

 

Calculus Notes 18

Linear Algebra Notes

 


 

There will be no lectures during Spring Break, Mar. 15 and Mar. 22. We will resume the course on Mar.29

 


 

Lecture 21, Mar. 29, 2005

 

Calculus: Vector Functions, the Chain Rule for functions of several variables

Linear Algebra: Optimal Portfolios

 

Calculus Notes 19
Linear Algebra Notes

 

Solutions to Homeworks 18-19


 

Lecture 22, Apr. 5, 2005

 

Calculus: The Inverse Function Theorem

Linear Algebra: Optimal Portfolios with a Risk Free asset

 

Calculus Notes 20
Linear Algebra Notes

 

Solutions to Homework 20

 


 

Lecture 23, Apr. 12, 2005

 

Calculus: The Inverse Function Theorem continued, the Implicit Function Theorem

Linear Algebra: Risk Neutral Probabilities

 

Calculus Notes 21

Linear Algebra Slides

 

Solutions to Homework 21

 


 

Lecture 24, Apr. 19, 2005

 

Calculus: The Implicit Function Theorem

Linear Algebra: The separation theorem

 

No new notes this week

 


 

Lecture 25, Apr. 26, 2005

 

Calculus: Lagrange Multipliers

Linear Algebra: Existence of a Risk Neutral measure

 

Calculus Notes 22

Multi-Period Market Model

 

Solutions to Homework 22

 


 

Note: Tuesday’s Lecture will start at 5:30pm

 

Lecture 26, May 3, 2005

 

Calculus: Finish Lagrange Multipliers

Linear Algebra: Multi-Period Market Models

 

No new Notes this week

 


 

Lecture 27, May 10, 2005

 

Calculus: Higher dimensional integrals

Linear Algebra: A binary tree market model

 

Calculus Notes 23
Binary Tree Model

 

Solutions to Homework 23

 


 

No Lecture  May 17, 2005

 


 

Lecture 28, May 24, 2005

 

Calculus: Multi-dimensional integrals

Linear Algebra: Martingales

 

Calculus Notes 24
Martingales

 

 

Solutions to Homework 24

 


 

Lecture 29, May 31, 2005

 

Calculus: Integrating functions whose set of discontinuities has Jordan content zero, Fubini’s Theorem

Linear Algebra: Martingales

 

Calculus Notes 25

 

Solution to Homework 25

 


 

Lecture 30, June 7, 2005

 

Calculus: Fubini’s Theorem, Integration over Jordan Domains
Linear Algebra: Martingales

 

Calculus Notes 26

 

 

Lecture 31, June 14, 2005

 

Calculus: Integration over Jordan Domains, Change of Variables in several variables
Linear Algebra: Risk Neutral Measure in the Multi-Period Market Model

 

Calculus Notes 27
Martingale Measure in the Multi-Period Market Model 1

 

Solutions to Homeworks 26-27

 


 

Lecture 32, June 21, 2005

 

Calculus: Change of Variables in several variables, Polar Coordinates, Curve Integrals.
Linear Algebra: Risk Neutral Measure in the Multi-Period Market Model

 

Calculus Notes 28

Solutions to Homework 28

 


 

Lecture 33, June 28, 2005

 

Calculus: Curve and Surface Integrals
Linear Algebra: Risk Neutral Measure in the Multi-Period Market Model

 

Calculus Notes 29

 

Solutions to Homework 29

 


 

Lecture 34, July 5, 2005

 

Calculus: Surface Integrals, Vector Fields
Linear Algebra: Risk Neutral Measure in the Multi-Period Market Model

 

Calculus Notes 30

Martingale Measure in the Multi-Period Market Model 2

 

Solutions to Homework 30

 


 

Lecture 35, July 12, 2005

 

Calculus: Vector Fields, Ordinary Differential Equations
Linear Algebra: Risk Neutral Measure in the Multi-Period Market Model

 

Calculus Notes 31

 


 

Lecture 36, July 19, 2005

 

Calculus: Ordinary Differential Equations, Partial Differential Equations

 

Calculus Notes 32

 


 

Lecture 37, July 26, 2005

 

Calculus: Partial Differential Equations, The Heat Equation, Fourier Transform

 

Calculus Notes 33

 


 

 

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