Our MFE students are trained to handle complex tasks in the financial world. There are many career options for our graduates in the financial industry, ranging from risk management to derivative pricing, algorithmic trading to portfolio management, regulation policy analyzing to insurance modelling. Our grads have joined premier commercial and investment banks, asset management firms, mutual funds, securities, regulatory bodies, consulting firms and insurance companies, while some have become private traders. Here are sample career paths for our MFE students:
The term “high risk, high returns” is well known in the financial industry. However, with a good risk management practice, organizations can increase the probability of achieving the desired return with minimum risk. Commercial banks need to manage credit risk in their loan portfolios. Mutual funds investing in stocks and bonds have to manage their market and liquidity risk. Prediction models for securities trading are subject to model risk. Financial engineers who are in charge of risk management may need to identify sources of risk, set risk limits or budgets, measure and assess risk, and use or develop tools for managing risk. Our program offers courses that provide fundamental and advanced techniques and tools for risk measurement and management including courses in financial derivatives, fixed income securities, credit risk modeling, and financial time series.
Structuring and derivative pricing
Large organizations or high-net-worth individuals seek for unique return characteristics. Sell-side companies design new products that meet the clients’ objectives, and develop a hedging strategy or act as a dealer or market maker to remove unwanted risk. Financial engineers need to create or use mathematical models for pricing complex financial products and analyze the effectiveness of the hedging or trading strategies. Our program provides a rigorous course in stochastic calculus for pricing, hedging and modeling, and apply it in financial derivatives and fixed income securities courses. Specialized and advanced tools and applications are offered through courses in simulation and financial modelling.
To make profits from trading, we need to “buy low” and “sell high”. This is easier said than done. Quantitative traders develop trading strategies to search for abnormal returns based on large data sets by using statistical tools to analyze data, and using programming skills to test and implement the trading strategies. Our program offers courses in statistics, financial time series and algorithmic trading and machine learning to train our students to turn data into successful trading strategies, and to develop computer codes to automate the trading strategies needed for high-frequency trading environments. Understanding the structure of the financial markets and the behaviors of investors is also critical for quant traders. The courses in behavioral finance and market microstructure are provided in our program to help enhance our students’ knowledge and skills.๙
Quantitative portfolio management
Portfolio managers manage money of their clients who could be retail investors, pension funds or insurance companies. Some mutual funds may manage portfolios with thousands of securities from various asset classes, while some specialized hedge funds may focus only on a few high-yield assets. Members of a quant portfolio team need to base their investment decisions on quantitative approaches driven by data and numbers, taking into account returns, costs and risk associated with the investments. Our program provides basic portfolio theory in the financial theories course, and provides tools for balancing between objectives and constraints in the optimization course. We also offer specific courses in quantitative portfolio management, and portfolio performance evaluation and attribution to prepare our students for this career path.