Master of Financial Economics

Last updated

A Master of Financial Economics [1] is a master's degree focusing on financial economics. [2] The degree provides [3] a rigorous understanding of theoretical finance and the economic framework upon which that theory is based. [4] The degree is postgraduate, and usually incorporates a thesis or research component. Programs may be offered jointly by the business school and the economics department.

Contents

Closely related degrees [1] include the Master of Finance and Economics [5] and the Master of Economics with a specialization in Finance. [6] Since 2014 undergraduate degrees in the discipline have also been offered. [7]

Structure

Masters in Financial Economics [8] are usually one to one and a half years in duration, and typically include a thesis or research component. The nature of the degree differs by university. Generally, the degree is largely theoretical, and prepares graduates for research positions, for doctoral study in economics, or for roles in applied economics. [9] [10] Some are positioned as professional degrees, preparing graduates for careers [3] in investment banking and finance, [11] [12] and are comparable to the Master of Science in Finance, though with an increased weighting towards economic theory. In some cases, programs are substantially quantitative [13] and are largely akin to a Master of Quantitative Finance.

The curriculum is distributed between theory, applications, and modelling, with the emphasis on each differing by university and program, as outlined.

The programs require a bachelor's degree prior to admission, but do not (usually) require an undergraduate major in finance or economics; a typical requirement is exposure to (multivariable) calculus and differential equations, statistics and probability theory, and linear algebra. Many programs include a review of these topics as an admission- or preliminary course. [10] [19] [16] [20] [21]

Comparison with other qualifications

There is some overlap with programs in financial engineering, computational finance and mathematical finance; see Master of Quantitative Finance (MQF). These degrees aim to train practitioners and "quants" — i.e. specialists in derivatives, fixed income and risk analysis — as opposed to economists, and their curricula are therefore weighted toward stochastic calculus, numerical methods, simulation techniques and programming, and are quantitative (well) beyond the level of the Financial Economics degree. Entrance requirements are similarly more mathematical. On the other hand, coverage of financial and economic theory, and econometrics, while significant, is comparatively secondary. [22] As mentioned, some Financial Economics programs are substantially quantitative; these differ little from the MQF.

The overlap with general finance degrees, such as a Master of Science in Finance (MSF) or an M.B.A. in finance, is further limited, particularly where the Financial Economics program is theory oriented. These degrees are focused on financial management, corporate finance and investment management, and are practice oriented with limited exposure to the underlying economic theory. However, since these courses train graduates in the use of the models developed in Financial Economics, the theory is (sometimes) covered [23] in the context of a (basic) understanding of model assumptions. Similar comments apply to professional certifications such as the Chartered Financial Analyst (CFA) designation. The Master of Finance (M.Fin.) and M.Sc. Finance, as opposed to the MSF, have a significant [23] theory component (as well as quantitative component), [24] and largely overlap with the Masters in Financial Economics.

See also

Notes

    Related Research Articles

    Finance is the study and discipline of money, currency and capital assets. 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 economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on both sides of a trade". Its concern is thus the interrelation of financial variables, such as share prices, interest rates and exchange rates, as opposed to those concerning the real economy. It has two main areas of focus: asset pricing and corporate finance; the first being the perspective of providers of capital, i.e. investors, and the second of users of capital. It thus provides the theoretical underpinning for much of finance.

    This aims to be a complete article list of economics topics:

    <span class="mw-page-title-main">William F. Sharpe</span> American economist (born 1934)

    William Forsyth Sharpe is an American economist. He is the STANCO 25 Professor of Finance, Emeritus at Stanford University's Graduate School of Business, and the winner of the 1990 Nobel Memorial Prize in Economic Sciences.

    Nancy Laura Stokey has been the Frederick Henry Prince Distinguished Service Professor of Economics at the University of Chicago since 1990 and focuses particularly on mathematical economics while recently conducting research about Growth Theory, economic dynamics, and fiscal/monetary policy. She earned her BA in economics from the University of Pennsylvania in 1972 and her PhD from Harvard University in 1978, under the direction of thesis advisor Kenneth Arrow. She is a Fellow of the Econometric Society, the American Academy of Arts and Sciences and the National Academy of Sciences. She previously served as a co editor of Econometrica and was a member of the Expert Panel of the Copenhagen Consensus. She received her Honorary Doctor of Laws (L.L.D) in 2012 from the University of Western Ontario.

    In financial economics, asset pricing refers to a formal treatment and development of two interrelated pricing principles, outlined below, together with the resultant models. There have been many models developed for different situations, but correspondingly, these stem from either general equilibrium asset pricing or rational asset pricing, the latter corresponding to risk neutral pricing.

    <span class="mw-page-title-main">Lars Peter Hansen</span> American economist

    Lars Peter Hansen is an American economist. He is the David Rockefeller Distinguished Service Professor in Economics, Statistics, and the Booth School of Business, at the University of Chicago and a 2013 recipient of the Nobel Memorial Prize in Economics.

    Business mathematics are mathematics used by commercial enterprises to record and manage business operations. Commercial organizations use mathematics in accounting, inventory management, marketing, sales forecasting, and financial analysis.

    A Bachelor of Economics is an academic degree awarded to students who have completed undergraduate studies in economics. Specialized economics degrees are also offered as a "tagged" BA (Econ), BS (Econ) / BSc (Econ), BCom (Econ), and BSocSc (Econ), or variants such as the "Bachelor of Economic Science".

    The Master of Economics is a postgraduate master's degree in economics comprising training in economic theory, econometrics, and/or applied economics. The degree is also offered as an MS or MSc, MA or MCom in economics; variants are the Master in Economic Sciences (MEconSc), and the Master of Applied Economics.

    The following outline is provided as an overview of and topical guide to finance:

    <span class="mw-page-title-main">Bendheim Center for Finance</span>

    Bendheim Center for Finance (BCF) is an interdisciplinary center at Princeton University. It was established in 1997 at the initiative of Ben Bernanke and is dedicated to research and education in the area of money and finance, in lieu of there not being a full professional business school at Princeton.

    Economics education or economic education is a field within economics that focuses on two main themes:

    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.

    <span class="mw-page-title-main">Master of Finance</span>

    The Master of Finance is a master's degree awarded by universities or graduate schools preparing students for careers in finance. The degree is often titled Master in Finance, or Master of Science in Finance. In the U.S. and Canada the program may be positioned as a professional degree. Particularly in Australia, the degree may be offered as a Master of Applied Finance (MAppFin). In some cases, the degree is offered as a Master of Management in Finance (MMF). More specifically focused and titled degrees are also offered.

    John Howland Cochrane is an American economist who has served as the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution since 2015. A specialist in financial economics and macroeconomics, he has been a professor of finance and economics by courtesy at the Stanford Graduate School of Business since 2016. From 1994 to 2015, he served as the AQR Capital Management Distinguished Service Professor of Finance at the University of Chicago Booth School of Business.

    Salih Nur Neftçi was a leading expert in the fields of financial markets and financial engineering. He served many advisory roles in national and international financial institutions, and was an active researcher in the fields of finance and financial engineering. Neftçi was an avid and highly regarded educator in mathematical finance who was well known for a lucid and accessible approach towards the field.

    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.

    Mathematical finance, also known as quantitative finance and financial mathematics, is a field of applied mathematics, concerned with mathematical modeling in the financial field.

    The European Joint Master degree in Economics provides a rigorous education in fundamental quantitative tools by combining economic theory with related quantitative disciplines such as Econometrics, Finance, Actuarial Science, Probability, Statistics, Mathematical Modeling, Computation and Simulation, Experimental Design, and Political Science, managed by consortia of higher education institutions from the European Union.

    References

    1. 1 2 American Economic Association (N.D.). Graduate degrees in economics
    2. 1 2 Cecilia Seiter (2023). Earning A Master’s In Economics: What To Know. Forbes
    3. 1 2 3 Nic Paton (2008). The art of finding a specialism. The Independent
    4. ↑ "U of T : Economics : Master of Financial Economics Program (MFE)". Mfe.economics.utoronto.ca. Retrieved 2010-10-19.
    5. 1 2 "MSc (Econ) Finance and Economics | School of Economics and Finance, Queen Mary, University of London". Econ.qmul.ac.uk. Archived from the original on 2010-03-06. Retrieved 2010-10-19.
    6. ↑ Master of Economics with a specialisation in Financial Economics, Macquarie University
    7. ↑ e.g.: Kent Archived 2014-02-21 at the Wayback Machine ; City London; UC Riverside; Leicester; Toronto; UMBC.
    8. ↑ Alphabetical list of US graduate programs in economics
    9. ↑ MS in Applied Financial Economics, John Cook School of Business, Saint Louis University
    10. 1 2 3 Birkbeck Financial Economics (MSc)
    11. ↑ "Economics Department, College of Liberal Arts and Social Sciences, Youngstown State University". As.ysu.edu. Archived from the original on 2011-12-24. Retrieved 2010-10-19.
    12. ↑ Financial Economics MSc, University of Leicester
    13. 1 2 "MS in Quantitative Financial Economics". Spears.okstate.edu. Archived from the original on 2009-03-15. Retrieved 2010-10-19.
    14. ↑ Outline for ‘Financial Economics’, Royal Holloway, University of London
    15. ↑ See for example: Macroeconomics for Financial Markets, University College Cork; MSc in Financial Economics, Oxford University; MSc in Financial Economics Archived 2012-02-29 at the Wayback Machine , Cardiff University.
    16. 1 2 "MCom (Financial Economics), University of Johannesburg". uj.ac.za. Archived from the original on 2014-11-22. Retrieved 2010-10-19.
    17. ↑ "City University, London - Modules: MSc Financial Economics". city.ac.uk. Retrieved 2010-11-05.
    18. ↑ "Financial Economics MSc - University of Glasgow". gla.ac.uk. 2018-01-25. Retrieved 2018-01-25.
    19. ↑ Manchester's "Pre-Session" Mathematics & Statistics Archived 2012-11-27 at the Wayback Machine
    20. ↑ MA in Financial Economics, IDC Herzliya
    21. ↑ Mathematics and Statistics for MA and MFE Students, University of Toronto
    22. ↑ Resolution to Establish a Program Leading to the Master of Science In Financial Economics, Columbia University Senate
    23. 1 2 Determine If a Master's in Finance Is the Right Move, usnews.com, Feb. 9, 2015.
    24. ↑ "Master in Finance - Bendheim Center for Finance - Princeton University". Princeton.edu. 2018-01-25. Retrieved 2018-01-25.
    This page is based on this Wikipedia article
    Text is available under the CC BY-SA 4.0 license; additional terms may apply.
    Images, videos and audio are available under their respective licenses.