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International Guide to Programs in Financial Engineering Quant Network LLC 1133

International Guide to Programs in Financial Engineering Quant Network LLC 1133 Broadway, Suite 708 New York, NY 10010 www.quantnet.com Publisher Andy Nguyen andy@quantnet.com Editor Katie Petito katie@katiepetito.com Art Director Nancy Ruzow nancy@ruzowgraphics.com Advertising Sales AND TO ORDER PRINT COPIES OF THIS GUIDE quantnet.com/advertise Copyright 2012-2013 by Quant Network LLC 1 QuantNet’s 2012-2013 International Guide to Programs in Financial Engineering | quantnet.com Welcome Welcome to the inaugural edition of the QuantNet 2012-2013 International Guide to Programs in Financial Engineering. Over the last few years, applications to financial engineering, mathematical finance, and similar programs have grown steadily despite a very difficult environment for global financial services. A profession where mathematical, programming, and finance knowledge can be combined remains a popular career choice among many students with a quantitative background. Candidates with strong technical skills will be in high demand for the foreseeable future, but the required skills and domain knowledge are rapidly changing, especially so for the finance industry post Dodd- Frank regulatory reform. The aim of this guide is to provide the information you need to prepare for the immediate goal, be it a stronger applicant to the top graduate programs, a better job applicant, or a more successful professional. Since its launch in 2003, QuantNet has come a long way. Today, as the top website for quant education and career resources, we serve 1.5 million unique visitors since 2010. Our audience is made up entirely of MFE applicants, quantitative finance professionals, academics, and employers. We hope that, having reading this guide, you’ll learn more about the industry and make better informed decisions on your education and career choices. Be sure to come visit and join us on QuantNet and take advantage of our special tools and community to help you connect with employers and network with other professionals in the field. With best wishes for your career, Andy Nguyen andy@quantnet.com Contents A Welcome Message from QuantNet by Andy Nguyen. ........................................................1 About Financial Engineering What Do Financial Engineers Do? by Aaron Brown.........................................................5 QuantNet Services Overview.................................7 So You Want to Be a Financial Engineer? Preparing for a Career in the Field by Todd Fahey. ..........................................................10 Efficient Ways to Set Up a Successful Career by Dan Stefanica......................................................15 READING LIST: Books about Financial Engineering............................................................17 Finding a Master of Financial Engineering Program Which Master’s Degree is Right for You? by Anthony DeAngelis. .............................................19 How to Pick an MFE Program by Aaron Brown...22 International List of Education Programs in Financial Engineering and Quantitative Finance. ...............................................................25 2011 QuantNet Ranking of Master of Financial Engineering Programs........................ ................32 Quant’s Next Top Model by Rachael Horsewood. .............................................35 Understanding the Quantitative Finance Industry in Asia by Chyng Wen Tee and Christopher Ting.................41 2 QUANTNET | 2012-2013 GUIDE | quantnet.com QuantNet China. ....................................................42 Do’s and Don’ts of MFE Applications by Bill Stanley. ..........................................................46 QuantNet MFE Application Tracker...................47 C++ Programming for Financial Engineering Online Certificate. ...............................................50 Graduate Schools Want Thoughtful, Well-Rounded Students by Gwen Stanczak. ...................................................52 Reading List: Books for Applicants and Students of Financial Engineering Programs....57 Getting a Job Hunting the Quant Job: Questions and Answers by Ellen Reeves.........................................................59 QuantNet Salary Survey....................................65 Questions Asked at Quant Interviews...............66 Firms that Employ Quants with MFE Degrees. .67 Why Join a Professional Organization? by Peg DiOrio. ...........................................................69 Reading List: Books to Help Prepare for Quant Interviews. ...............................................71 Appendix Excel 2007/2010 Shortcuts. ................................72 Advertisers Index.........................................74 3 QuantNet’s 2012-2013 International Guide to Programs in Financial Engineering | quantnet.com Section 1: About Financial Engineering 4 QUANTNET | 2012-2013 GUIDE | quantnet.com he function of finance is to connect providers of capital with users of capital. This can be a simple process. For example, a venture capitalist might find wealthy individuals to fund start-up companies. This venture capitalist might make use of tools such as a spreadsheet and quantitative theory such as discounted cash flow valuation, but has little need for a specialized financial engineer. Most finance is done in more complicated ways, using intermediate institutions such as banks, exchanges, and special purpose entities. Many people with technical skills are needed to keep this system running. I do not consider them financial engineers, however. They work in finance and have quantitative skills, but they are doing niche jobs for which the field of application doesn’t matter much. Designing databases or solving equations for a bank is not essentially different from doing the same tasks for, say, a parcel delivery service or an aircraft manufacturer. I define a financial engineer as someone using technical skills in the finance industry whose work is informed by the end-to-end, capital provider to capital user, effects of what he does. It is not necessarily a better or more honorable profession than the specialists who make up most of the financial technical workforce. It does require different attitudes and skills, and it presents different challenges and offers different rewards. There are three characteristics any engineer must have. First, she must accept reality. She does not spend effort worrying about how things might have been different, or complaining to the universe or agitating for other people to change their ways. She is not concerned with opinions, untestable propositions, or abstractions that do not affect decisions. Second, she must have a vision for how things could be better. It need not be an individual vision, many engineers function best on group projects, but random tinkering is not engineering. Third, she must have the drive and skills to accomplish her vision through her own efforts. She can fail at the third step and be a failed engineer. But if she fails at either of the first two steps, she’s something other than an engineer. The engineer’s prayer is, “Thank you ____ (fill in what- ever you feel gratitude toward for existence) for the universe and for my eyes, my hands, my brain. I’ll take it from here.” continued on page 6 What Do Financial Engineers Do? Engineering is not merely knowing and being knowledgeable, like a walking encyclopedia; engineering is not merely analysis; engineering is not merely the possession of the capacity to get elegant solutions to nonexistent engineering problems; engineering is practicing the art of the organized forcing of technological change. Engineers operate at the interface between science and society. —Gordon Brown By Aaron Brown 5 QuantNet’s 2012-2013 International Guide to Programs in Financial Engineering | quantnet.com What Do Financial Engineers Do? continued from page 5 This definition generates two questions. Do you need a financial engineering degree in order to be a financial engineer? The answer is “no”; some of the greatest engineers in history were self-educated. However, a good financial engineering program is the most efficient way to pick up the necessary knowledge. You would have to work for many years, in many areas of finance, to become familiar with the financial system end-to-end through direct experience. You can learn most of the technical skills from books and the Internet, but not the practical details that are essential to sound engineering. Thirty years ago, a quant with a good general education, a curious mind, and a diverse set of industry contacts could teach himself. Today it would be extremely difficult. The second question is whether there is any reason to enter a financial engineering program if you do not want to be a financial engineer. This one is tricky. The reason employers hire people from financial engineering programs is they need employees with a breadth of technical financial knowledge. Only a few employers want engineers of any stripe; engineers can be disruptive. Employers are more likely to be looking for technical specialists who can move to different areas as needed, and who might avoid some tunnel vision mistakes of a quant without general financial training. So you might be tempted to get a financial engineering degree in order to have a better chance of getting a job as a technical specialist. That can work, but I think it’s rarely a good idea. The trouble is people like that usually have short careers in finance. When you amortize the cost of the program along with the lost employment time while in the program, you might well end up making more money in a lower- salaried, less volatile career. More important, that lower- salaried career can progress naturally. You won’t face a mid- career transition after being laid off from a high-paying job, having to start over in some other field. Another point is there are probably cheaper and easier things you can do to improve your chances of landing a technical specialist job in finance than get an MFE. What is it like to be a financial engineer? I have to start with a caveat. The world is changing fast, and the financial world is changing faster. It’s easier to predict functions than institutional roles. For example, I’m pretty confident financial engineers will be describing the possible evolution of derivative prices for many years, and probably using some kind of generalized Monte Carlo to do it. But I have much less confidence that they will be doing it on anything like a modern dealer trading desk. uploads/Finance/ quantnet-guide-2012-2013.pdf