Financial Mathematics is a young applied mathematical discipline which uses mathematical (especially stochastic) methods and models for conducting financial estimations, forecasting of financial markets and analysis of financial risks.
The following areas of financial mathematics are distinguished nowadays:
- stochastic financial mathematics - probabilistic methods of forecasting financial markets, the calculation of the arbitration costs of financial instruments;
- classical financial mathematics - the calculations of interest, analysis of the stream of payments which are used in banking, lending and investment;
- actuarial mathematics – the mathematical foundation of insurance;
- econometrics – conducting of financial estimations related to forecasting of financial markets.
Course "Financial Mathematics" is proposed to the listeners of Summer School for the first time. Emphasis will be put on mathematical methods of financial forecasting and elements of actuarial mathematics.