《北美SOA考试Financial Mathematics辅导书》.pdf

Deeper Understanding, Faster Calculation --Exam FM Insights Shortcuts Part I: Theories of Interest 7th Edition by Yufeng Guo Spring 2008 / This electronic book is intended for individual buyer use for the sole purpose of preparing for Exam FM. This book may NOT be resold or otherwise redistributed to others. No part of this publication may be reproduced for resale or multiple copy distribution without the express written permission of the author. © 2008, 2009 By Yufeng Guo Spring, 2008 FM ©Yufeng Guo, Page 1 of 625 Contents Part One: Theories of Interest Chapter 1 Exam-taking and study strategy 5 A tale of two Exam FM takers, Mr. Busy and Mr. Lazy 5 Truths about Exam FM 9 How to study hard yet fail the exam miserably 11 Recommended study method 13 How to build a 3 minute solution script 14 How to eliminate errors 30 Chapter 2 Getting started 48 Chapter 3 FM Fundamental 49 Time value of money 49 Principal 49 Interest rate 49 Simple interest rate 49 Compound interest rate 50 Force of interest 52 Nominal interest rate 58 APR 59 Annual effective interest rate 60 Continuous compounding 60 Effective annual rate of discount 61 Simple annual rate of discount 63 Nominal annual rate of discount 63 Future value 64 Present value 64 Convert interest rate to discount rate or vice versa 66 PV of a stream of cash flows 71 Net Present Value 71 Internal rate of return (IRR) 71 Asset and its price 73 Convert a cash flow from one point of time to another point of time 74 Collapse multiple cash flows into a single cash flow 75 Annuity – colla