Financial Mathematics Major Project
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ACSC12-202/ACSC71-201: Financial Mathematics Major Project – 10%
Due: Midday, Friday the 1st of April
Please Note. This assessment item is weighted at 10% of the marks for this
subject. The project, as described below, is rather broad and could potentially
become very time consuming to fine-tune. Allocate your time and efforts
according to the weight of this assessment item and balanced against the
assessment you have in all your subjects as well as the approaching EOS exams.
Covid has taught Governments around the world the fragility of quite a few segments of the economy. One
segment that was hit hard was the teaching sector. Treasury wants to investigate the impact on this sector
of a multi-year event, such as Covid-19, via modelling the financial advantages/disadvantages of various
policies intended to lessen the impact of such an event. To this end they have called tenders for the
provision of a prototype model to be developed in Excel.
Your job, should you choose to accept the consultancy, is to create the financial model most suited to win
this competitive tender. Given the rather broad boundaries set, you call an old lecturer of yours (DrG) with
ties to Treasury, asking for help. In a secret meeting at CBD, disguised as a thank-you lunch for past
teaching, you ply your lecturer with socially acceptable drugs and quiz him for what features are going to
discriminate your model from others who tender.
A few hours later you have your list. Whilst it shows the battle damage of champagne and beer, it is legible
and contains several features Treasury expect to use in the tender evaluation process:
1. Data has been collected and entered from a range of reliable sources (such as ABS)
2. The model projects the flow of money from source to sinks
3. Projections include uncertainty bounds via simple stochastic modelling (Weiner processes only)
4. What-if analysis can be used to determine the impact of Government policies
5. The model is extensible using modular design principles
You are to research and develop a financial model of the Australian Tertiary Education system. All
assumptions and data used in your model must be explained in your submission. To demonstrate point 5
above you are encouraged to document the financial impact of certain policies such as:
• Use of Job-Keeper and similar programs
• Impact of moving to on-line teaching
• Restriction on numbers of overseas students
• Minimalistic Government Financial intervention
Marking:
Whilst you are permitted to work in groups, this assessment item is individually marked. Should you share
data with/from other students, then please reference the contributions in the Acknowledgement section of
your report. Similarly, with the design of the various modules within your system model.