Master of Quantitative Finance

All you want to know about Master of Quantitative Finance

A masters degree in quantitative or mathematical finance concerns the application of mathematical methods to the solution of problems in finance [1]. There are several "like-titled degrees"[2] which may further focus on financial engineering, financial risk management, computational finance and /or mathematical finance. In general, these degrees aim to produce quantitative analysts ("quants"), specialized in the analysis, structuring, pricing, and trading of financial instruments – with a particular emphasis on derivatives and fixed income – and the hedging and management of the resultant financial and credit risk. Formal training in quantitative finance has existed only for the last 20 years [3].

Contents

Structure

The curriculum is intended to build quantitative skills as well as knowledge of the underlying theory of finance. The quantitative component draws on applied mathematics, computer science and statistics - and emphasizes stochastic calculus, numerical methods and simulation techniques [4]; many programs also focus on econometrics / time series analysis [5] [6]. The theory component usually includes a formal study of financial economics, addressing portfolio management, asset pricing and financial markets; some programs may also include general coverage of economics, accounting and corporate finance [7].

The title of the degree will depend on emphasis [8], the major differences between programs being the curriculum’s distribution between mathematical, statistical and computational techniques, and financial theory and its applications [9]. The more theoretically oriented degrees are usually termed “Masters in Mathematical Finance” or “Masters in Financial Mathematics” while those oriented toward practice are termed “Masters in Financial Engineering” or “Masters in Computational Finance”; “Masters in Quantitative Finance” is the more general degree title. The practice oriented programs are often positioned as professional degrees.

The program is usually one year in duration, and may additionally include a thesis component. Entrance requirements are generally multivariable calculus, linear algebra, differential equations and some exposure to computer programming (usually C++) [10]; programs emphasizing financial mathematics may require some background in Measure theory.

Comparison with other qualifications

The program differs from that of a Master of Science in Finance (MSF) in that the MSF aims to produce finance generalists as opposed to "quants", and therefore focuses on corporate finance, accounting, equity valuation and portfolio management; the treatment of any common topics - usually financial modeling and risk management - will be less (or even non) technical. Entrance requirements are similarly less mathematical.

In addition to the study of probability, there are various other topics that would be considered part of both actuarial science and quantitative finance [11], and there is therefore some overlap between the degrees (and they are often offered by the same department). Nevertheless, quantitative finance programs are distinct from those in actuarial science [12]. Specifically, whereas actuarial programs cover risk and uncertainty as applied to pensions, insurance and investments, quantitative finance programs are broader (although offer less depth in these areas), and prepare graduates for the various highly numerate roles in finance [13] - and for other areas that require "quants" [14].

See also

External links and references

Discussion

List of Programs

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