Maths Learning Service: Revision

Matrices
Intro. to Fin. Maths I

A matrix is an array of numbers, written within a set of [ ] brackets, and arranged into a
pattern of rows and columns. For example:
2 3
" # 1 0 0
1 2 3 h i
6 7
, 4 0 1 0 5, 21 7 4 9
4 5 6
0 0 1

The order (or size, or dimension) of a matrix is written as “m ⇥ n” where m = the number
of rows, and n = the number of columns. For example, the matrices above have dimensions

2 ⇥ 3, 3 ⇥ 3 and 1 ⇥ 4.

Basic Matrix Operations

Addition (or subtraction) of matrices is performed by adding (or subtracting) elements in

corresponding positions. Addition is only valid if the two matrices have the same order.
Examples:
" # " # " # " #
2 4 0 3 4 1 2+3 4 + 4 0 + ( 1) 5 0 1
(i) + = =
1 3 5 7 0 2 1+7 3 + 0 5 + ( 2) 6 3 3
" # " # " # " #
3 4 1 7 3 1 4 7 2 3
(ii) = =
2 0 8 1 2 ( 8) 0 1 6 1
" # " #
2 4 0 3 4
(iii) + cannot be done as the orders are di↵erent.
1 3 5 2 0

When a matrix is multiplied by a real number (called a scalar), each element is multiplied by
the scalar. The result is another matrix of the same order.
Examples:
2 3 2 3 2 3
2 1 4⇥2 4⇥1 8 4
6
(i) 4 4 3 9 7 6
5 = 4 4⇥ 3 4⇥9 7 6
5 = 4 12 36 7
5
0 5 4⇥0 4⇥ 5 0 20

1h i h i
(ii) 7 8 10 6 0.4 = 3.5 4 5 3 0.2
2
" # " # " # " # " #
5 3 3 4 10 6 9 12 1 18
(iii) 2 3 = =
0 6 1 7 0 12 3 21 3 33
Matrices 2007 Intro to Financial Maths I Revision/3

Matrix multiplication is only defined when the number of columns

in the first matrix equals the number of rows in the second.

" # " #
13 19 16 22
(iv) CD = but DC = so CD 6= DC.
27 43 27 40

In general AB 6= BA for matrices.

" #" # " #

1 2 1 0 1⇥1+2⇥0 1⇥0+2⇥1
(v) CI = =
3 4 0 1 3⇥1+4⇥0 3⇥0+4⇥1
" #
1 2
= = C (unchanged)
3 4
" #" # " #
1 0 1 2 1 2
(vi) IC = = = C (unchanged)
0 1 3 4 3 4

The matrix I is an identity matrix and is the

matrix equivalent of the number 1 in scalar multiplication.

Notes: 1. The identity is an exception to the general rule for matrix multiplication since
CI = IC = C.

2. Identity matrices only exist for square matrices. The matrix I used in Ex-
amples (v) and (vi) is called “the identity
2
matrix
3
for a 2 ⇥ 2 matrix”. The
1 0 0
6 7
identity matrix for a 3 ⇥ 3 matrix is 4 0 1 0 5.
0 0 1

Exercises
2 3 2 3
" # " # 1 1 2 0 " #
1 0 2 3 1 6 3 2
A= B= C=4 2 7 6
5 D=4
7
0 1 2 5 E=
1 2 3 1 2 1 7
2 1 3 4

(2) Using the above matrices, calculate the following (if possible):

(a) AB (b) BA (c) DI (d) ID (e) CD

(f) DC (g) BC (h) CB (i) E2 (j) B2

Matrices 2007 Intro to Financial Maths I Revision/4

Answers to Exercises
" # " # " #
6 3 3 12 7 10 3
(1) (a) (b) same as (a) (c) (d)
6 5 9 4 7 4 11
" # " #
10 3 3 6 0
(e) (f) not possible (g) not possible (h)
4 11 12 15 9
" #
13 9
(i) (j) not possible
8 16

" #
2 3 1
(2) (a) (b) not possible (c) D (d) D
8 5 5
2 3
3 " #
6 7 6
(e) not possible (f) 4 6 5 (g) (h) not possible
3
15
" #
11 8
(i) E 2 = EE = (j) not possible
4 51