Finance refers to monetary resources and to the study and discipline of money, currency, assets and liabilities. As a subject of study, it is related to but distinct from economics, which is the study of the production, distribution, and consumption of goods and services. Based on the scope of financial activities in financial systems, the discipline can be divided into personal, corporate, and public finance.
Financial engineering is a multidisciplinary field involving financial theory, methods of engineering, tools of mathematics and the practice of programming. It has also been defined as the application of technical methods, especially from mathematical finance and computational finance, in the practice of finance.
Credit risk is the possibility of losing a lender holds due to a risk of default on a debt that may arise from a borrower failing to make required payments. In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection costs. The loss may be complete or partial. In an efficient market, higher levels of credit risk will be associated with higher borrowing costs. Because of this, measures of borrowing costs such as yield spreads can be used to infer credit risk levels based on assessments by market participants.
In finance, statistical arbitrage is a class of short-term financial trading strategies that employ mean reversion models involving broadly diversified portfolios of securities held for short periods of time. These strategies are supported by substantial mathematical, computational, and trading platforms.
Financial risk management is the practice of protecting economic value in a firm by managing exposure to financial risk - principally operational risk, credit risk and market risk, with more specific variants as listed aside. As for risk management more generally, financial risk management requires identifying the sources of risk, measuring these, and crafting plans to mitigate them. See Finance § Risk management for an overview.
Financial modeling is the task of building an abstract representation of a real world financial situation. This is a mathematical model designed to represent the performance of a financial asset or portfolio of a business, project, or any other investment.
Computational finance is a branch of applied computer science that deals with problems of practical interest in finance. Some slightly different definitions are the study of data and algorithms currently used in finance and the mathematics of computer programs that realize financial models or systems.
The following outline is provided as an overview of and topical guide to finance:
A master's degree in quantitative finance is a postgraduate degree focused on the application of mathematical methods to the solution of problems in financial economics. There are several like-titled degrees which may further focus on financial engineering, computational finance, mathematical finance, and/or financial risk management.
Jim Gatheral is a researcher in the field of mathematical finance, who has contributed to the study of volatility as applied to the pricing and risk management of derivatives. A recurrent subject in his books and papers is the volatility smile, and he published in 2006 a book The Volatility Surface based on a course he taught for six years at New York University, along with Nassim Taleb. More recently his work has moved in the direction of market microstructure, especially as applied to algorithmic trading. He is the author of The Volatility Surface: A Practitioner's Guide.
Neil A. Chriss is a mathematician, academic, hedge fund manager, philanthropist and a founding board member of the charity organization "Math for America" which seeks to improve math education in the United States. Chriss also serves on the board of trustees of the Institute for Advanced Study.
Bruno Dupire is a researcher and lecturer in quantitative finance. He is currently Head of Quantitative Research at Bloomberg LP. He is best known for his contributions to local volatility modeling and Functional Itô Calculus. He is also an Instructor at New York University since 2005, in the Courant Master of Science Program in Mathematics in Finance.
Mark Suresh Joshi was British researcher and consultant in mathematical finance. His last position was a professor at the University of Melbourne in Australia.
Quantitative analysis is the use of mathematical and statistical methods in finance and investment management. Those working in the field are quantitative analysts (quants). Quants tend to specialize in specific areas which may include derivative structuring or pricing, risk management, investment management and other related finance occupations. The occupation is similar to those in industrial mathematics in other industries. The process usually consists of searching vast databases for patterns, such as correlations among liquid assets or price-movement patterns.
The Tepper School of Business is the business school of Carnegie Mellon University. It is located in the university's 140-acre (0.57 km2) campus in Pittsburgh, Pennsylvania.
Riccardo Rebonato is Professor of Finance at EDHEC Business School and EDHEC-Risk Institute, Scientific Director of the EDHEC Risk Climate Impact Institute (ERCII), and author of journal articles and books on Mathematical Finance, covering derivatives pricing, risk management, asset allocation and climate change. In 2022 he was granted the PRM Quant of the Year award for 'outstanding contributions to the field of quantitative portfolio theory'. Prior to this, he was Global Head of Rates and FX Analytics at PIMCO.
Cormac Kinney is a serial entrepreneur, known for Diamond Standard, a regulator-approved fungible diamond commodity, Heatmaps, cited in 5,800 US Patents, and a publisher social network acquired by News Corp.
Robert F. Almgren is an applied mathematician, academic, and businessman focused on market microstructure and order execution. He is the son of Princeton mathematician Frederick J. Almgren, Jr. With Neil Chriss, he wrote the seminal paper "Optimal execution of portfolio transactions," which Institutional Investor said "helped lay the groundwork for arrival-price algorithms being developed on Wall Street." In 2008 with Christian Hauff, he cofounded Quantitative Brokers, a financial technology company providing agency algorithmic execution in futures and interest rate markets. He is currently Chief Scientist at QB and a Professor of the Practice in Operations Research and Financial Engineering at Princeton University.
Raphael Douady is a French mathematician and economist. He holds the Robert Frey Endowed Chair for Quantitative Finance at Stony Brook, New York. He is a fellow of the Centre d’Economie de la Sorbonne, Paris 1 Pantheon-Sorbonne University, and academic director of the Laboratory of Excellence on Financial Regulation.
Marco Avellaneda (Ph.D.) was an Argentinean mathematician and financial consultant. He was the director of the Division of Financial Mathematics at the Courant Institute at New York University.
