Financial engineering and risk management are essential for students taking MBA and Master’s programmes in finance. Do not get put off by the name - financial engineering has nothing to do with any of the fields in traditional engineering. In the broadest definition, anyone who uses technical tools in finance could be called a "financial engineer" - like a computer programmer in a bank or statistician in a government economic bureau.
FE is a multidisciplinary field drawing from finance and economics, mathematics, statistics, engineering and computational methods.
"Financial Engineering and Risk Management Part I" is a free self-paced online course taught in English. The course consists of 12 hours of videos. It is suitable for a wide international audience.
The focus of the course is on the usage of simple stochastic models to price derivative securities in various asset classes including equities, fixed income, credit and mortgage-backed securities. Moreover, the role of some of the aforementioned asset classes will be considered in explaining the financial crisis.
The follow-on course FE & RM Part II will continue to develop derivatives pricing models but it will also focus on asset allocation and portfolio optimization as well as other applications of financial engineering such as real options, commodity and energy derivatives and algorithmic trading.
ABOUT THE COURSE
Students who complete the course will begin to understand the "rocket science" behind financial engineering, but perhaps more importantly, they will also understand the limitations of this theory in practice and why financial models should always be treated with a healthy degree of scepticism.
Start date: any time
Length: self-paced online course
Professor: Martin Haugh & Garud Iyengar
University: Columbia University