A86003 Mathematics for Business, Economics and Finance

Scuola di Economia e Management
Academic Year 2017/18 Annual

Learning Objectives

This course introduces students to fundamental concepts of calculus, linear algebra and financial mathematics. The emphasis is on the application of mathematical methods to solving practical problems in business, economics and finance.

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

  • Apply mathematical reasoning to analyse essential features of various mathematical problems;
  • Solve microeconomic problems in one or more decision variables;
  • Solve economic and business problems involving the optimization with respect to one or more decision variables;
  • Understand the principles of financial mathematics.

Learning targets

The student will gain knowledge and understanding of

  • Elements of calculus of one variable and their applications in economics and business;
  • Elements of calculus of several variables and their applications in economics and business;
  • Linear algebra;
  • Basic problems in financial mathematics.

Course Content

Topics covered in Mathematics for Business, Economics and Finance are linear functions, polynomial functions, exponential and logarithmic functions, inverse functions, composite functions, limits, continuity and derivatives of functions of one and several variables, rules for differentiation, interpretations of the derivative, second and higher order derivatives, concavity and convexity, implicit differentiation, Taylor’s Formula, constrained and unconstrained optimization, integration, introduction to linear algebra, series, including geometric and harmonic series, ordinary differential equations, interest rates, present value and discounting, mortgages and investment appraisal.

Course Delivery

The course is made up of theoretical lessons, in-class assignments, homework assignments, case studies and experiential laboratory.

Lectures are held throughout the entire year. Students are responsible for learning the material before coming to class.

Students are responsible for consulting on a regular basis the website of the course on “my.liuc.it” where updates, additional material, slides and exercises for the course are posted.

  There will be a test at the end of the first semester.

Required Readings

K. Sydsaeter, P. Hammond and A. Strom, Essential Mathematics for Economic Analysis, 4th Edition, Pearson, 2012.

I. Jacques, Mathematics for Economics and Business, 7th Edition, Pearson, 2012.

E. Dowling, Schaum's Outline of Mathematical Methods for Business and Economics, US: McGraw-Hill, 2009. (eISBN: 9780071702461 and ISBN: 9780071635325)

P. Zema and R. L. Brown, Mathematics of finance, 2nd Edition, McGraw-Hill, 2011.

Course Evaluation

Final exam:

The assessment is based on a written exam at the end of the course. The exam consists of eight exercises aimed at assessing the fundamental knowledge of calculus and linear algebra and the ability to solve economic, financial and business problems by means of mathematical tools. To pass the exam the student needs to achieve a grade higher than 18/30.


Partial exams:

For attending students only, the exam is made up of two written tests, one at the end of each semester. Sufficiency in both tests is required to pass the exam (sufficiency = grade higher than 18/30). Homework is assigned throughout the year and a positive evaluation of homework entitles the student to a maximum of 3 extra points on the score of the first test and 3 extra points on the score of the second test.

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