According to the experts at the International Association for Quantitative Finance, financial engineers work throughout the finance industry to apply mathematical principles to the issues facing:
- banks
- investment firms
- insurance companies
Pursuing a career in this rigorous discipline can pay off in rich financial rewards. It can open doors of opportunity for students who complete a Master of Science degree in Financial Engineering. Here are five primary concentrations to consider when working toward a degree in this essential field of finance.
Derivatives
Commodities and derivatives represent a major sector of the investment industry. Predicting the movements of these stock options requires a thorough grounding in risk management, especially as it applies to term investment structures and volatility in the marketplace. Coursework for this concentration typically includes an overview of the stock market and the various investment options available in this financial arena. Students will also examine topics related to computing in the industry. They’ll gain a working familiarity with some of the most commonly used applications for risk assessment and performance evaluation in the financial engineering field.
Asset Management
For students pursuing an advanced degree in financial engineering, an asset management concentration can provide the skills needed to achieve success as an advisor to corporate entities and individuals alike. Allocation and diversification are among the key concepts presented in these curricula. They offer a closer look at the best ways to address risk and reward in the financial marketplace. Students typically examine issues associated with building successful investment portfolios. They learn the mathematical principles and techniques used in evaluating various stocks. Computer applications are also included in the general curriculum to ensure that graduates have the skills needed to succeed in their professional careers.
Trading Systems
The mathematical skills necessary for success in financial engineering can be applied directly to determining the best entry and exit strategies for various investments in the stock market. By creating algorithms that can be applied across a wide range of trading systems, financial analysts and engineers can ensure uniform treatment of similar investments. They can fine-tune strategies to generate the highest profits for their corporate partners and individual clients. Coursework typically focuses on pricing for derivatives and other securities and algorithmic strategies that provide the most accurate predictions. This can provide valuable experience for students interested in a career in financial engineering.
Financial Computation
Students with a strong interest in computing can put their skills to use by choosing a concentration in the field of financial computation. Coursework generally focuses on:
- the programming skills necessary to create applications used in the financial field
- tools used by investment firms and brokers to manage their client portfolios and achieve the highest degree of profitability
By taking on the challenges of modern information technology, graduates can often snag high-paying jobs in the financial field while playing a vital role in the investment industry. This can ensure the widest range of job opportunities for financial engineers after graduation.
Finance and Economic Systems
A concentration in finance and economic systems can prepare aspiring financial engineers for jobs in:
- large corporations
- international investment firms
- government agencies
Foreign exchange securities and associated derivatives are among some of the most common topics covered in these financial engineering curricula. Students can also expect to spend a good portion of their time on macroeconomic topics that include:
- corporate finance
- economics
- the predictive tools used to assess large-scale market shifts
By applying mathematical methodologies to these issues, financial engineers can create new solutions and algorithms designed for the domestic and international investment marketplace.
A Master’s degree in Financial Engineering can serve as a solid foundation for future success in the investment banking field. With these advanced degrees, students can create the tools and the strategies necessary to achieve profitability on behalf of their companies and their clients. The degree will also expand employment opportunities immediately and well into the future.
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