# Financial Mathematics

## Project

Project milestones:

1. Team members (5 points) due 7 October 2011
You get 5 points for turning in on time a complete team, 3-4 persons. If you turned in a team of one or two you do not get the points.

2. Brief project description (15 points) due 17 October 2011
For this step of the project you must turn in a brief, 2-3 paragraphs, description of the proposed work. For complete credit you must turn in a page per team with the project description plus each team member must provide an evaluation for each other team member. 5 points will be given for the project description, 5 points for your evaluations of the other team members and 5 points for the other team members evaluations of you.

Here is a proposed list of projects:
- Describe home mortgage
- Describe adjustable rate home mortgage
- Explain the causes of a financial crisis
- Analyze a publicly traded company
- Analyze a real estate deal
- Build a stock portfolio
- Explain the terms used in one of the Mad Money shows on CNN
- Calculate how expensive the check cashing and pay-day loans are for a person with no bank account
- Introduction to stock options
- Introduction to financial derivatives
- Describe 401k
- Describe and compare traditional and Roth IRA

3. Progress report (20 points) due 11 November 2011 [pdf]

Each team must choose a different project leader for each of the three project deliverables (progress report, final report, presentation). The progress report must state clearly who is the team leader of each phase. This document will focus on the progress report due on Friday, November 11, 2011.

The time until the progress report due date should be dedicated to research and background reading. The material presented in class will be useful, but you will encounter new terms and situations you will have to understand and explain. The goal of the project is to practice using the notions from class and demonstrate your ability to use them in a new situation.

Based on your reading and research you will come up with a clear plan of what your project will accomplish. The plan should contain specific tasks assigned to team members. Each task should be clearly defined, have a deadline and an estimate, in hours, of how long it will take. After you turn in the progress report every member of the team must have a clear idea what their part of the project is going to be. Don’t forget to allocate time for integrating of the parts created by each member, as well as preparing the presentation.

Each team member should research a topic part of the project and write a report and pass it to the team leader. The team leader will compile all the reports into one document (giving credit to each team member) and will be responsible for turning it in. I will not accept explanations like ‘we all worked together’. You all work together towards a common goal, but each of you must be responsible for one part of the project.

The project leader is also responsible for evaluating the team members. Separately, each team member has to evaluate the effectiveness of the leader. The report will be confidential and you will be provided later with a form.

If your project is not turned in at the deadline the project leader will loose 5 points per day for each day you are late. The first late day starts at 9:00 am the day the project is due. This means that if the project is turned in after class or later in the day, the project leader will loose 5 points from the grade. The other members of the team will not loose points as long as they demonstrate they did their part. I hope this situation will not arise.

If the team leader is forced to turn in an incomplete report because one or more of the team members did not turn in their part on time or at all, then the students that did not do their job will automatically loose all 20 points allocated to the progress report.

4. Final report (30 points) due 30 November 2011 [pdf]

The team leader is responsible for turning in the final report, as well as, a written evaluation of each team member. There is no form, you have to write a paragraph about each team member’s contribution, as well as any praise or criticism.

Each team member will also have to turn in an evaluation of their teammates and the team leader.

The project report is 4-5 page paper on the topic you chose. Your report should have the format of a research paper. You should have an abstract and the following structure: introduction, two-three sections, conclusions, and references.

The goal of the abstract is to give the reader and idea what your paper is about and, more importantly, convince the reader to read the rest of the paper. The introduction section should end with a roadmap of the rest of the paper.

For an example check: Integration and Contagion in US Housing Markets by John Cotter, Stuart Gabriel and Richard Roll.
Use reasonable page margins, single spaced paragraphs and a 11pt or 12pt font.

For more specific questions related to your topic, do not hesitate to email me.

5. Presentation (30 points) last three classes

The team member evaluations have the same format as the ones for the final report and they are due after your presentation.

The presentation is 10-15 minutes long. The presentations will take place on Nov 30, Dec 2, Dec 5.

The deadline for signing up for presentations (by email) is Monday, Nov 21, 5pm.