Actuarial Science Meets Financial Economics

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Table of Contents

Actuarial Science Meets Financial Economics

Similarities

Different Approaches

Risk

Portfolio Risk

Portfolio Risk

Interest Rates

Interest Rate Dimensions

Yield Curves

Profitability

Valuation

Current State of Financial Economics

Asset Pricing Models

Empirical Tests of the CAPM

Arbitrage Pricing Model (APM)

Empirical Tests of APM

Option Pricing Model

Black-Scholes Option Pricing Model

Diffusion Processes

Hedging

Duration

Duration Measures

Applications of Financial Economics to Insurance

Conclusion