Financial Engineering

Interested in Financial Engineering! Test your knowledge
in this area with our 5-minute Quiz.

Financial engineering (also called computational finance, mathematical finance, or quantitative finance) is a multi-disciplinary program, usually at the graduate level, that prepares students to work in the banking, financial management, and securities industries, or as quantitative analysts for a variety of firms. Which of the following areas of study is not core to financial engineering?
1. applied mathematics
2. computer programming
3. economics
4. supply chain management
5. financial economics
How do graduate financial engineering programs differ from traditional mathematics and statistics programs?
1. financial engineering students are always assigned to classes that are separate from mathematics and statistics graduate students
2. financial engineering does not involve theory courses
3. financial engineering emphasizes financial applications of mathematics
4. PhD programs in mathematics and statistics are typically shorter than financial engineering programs
How do graduate financial engineering programs differ from traditional MBA in Finance programs?
1. MBA programs do not require previous coursework in mathematics
2. financial engineering programs include more rigorous and in-depth mathematical and computer programming training
3. financial engineering students do not take management courses with a discussion format and case-method approach
4. financial engineering programs do not include the study of financial theory
How long have Master's programs in quantitative finance been around?
1. about 5 years
2. about 10 years
3. about 20 years
4. about 30 years
True or false: Bachelor's programs are not offered in financial engineering.
1. True
2. False
Financial engineers may pursue a variety of careers in securities trading, risk management, portfolio management, financial modeling, and more. According to a 2002 survey by the International Association of Financial Engineers, in which area did over one-third of respondents say they were interested in finding a job?
1. financial modeling
2. risk management
3. trading derivative instruments
4. derivatives pricing
Quantitative analysts may work in derivatives pricing and hedging. Which of the following is not a derivative security?
1. treasury bond
2. credit default swap
3. oil futures
4. employee stock option
True or false: Among professionals working in computational finance, C++ is the dominant programming language.
1. True
2. False
Fischer Black, Myron Scholes, and Robert Merton were quantitative analysts who published papers on options pricing in 1973. Their research led to the creation of the Black-Scholes model. In what year did Merton and Scholes receive the Nobel Prize in Economics for their work?
1. 1979
2. 1983
3. 1990
4. 1997
The Wiener process is used by financial engineers to model stock prices and bond interest rates, and is part of the Black-Scholes model. What branch of mathematics is applied in the Wiener process?
1. propositional calculus
2. lambda calculus
3. stochastic calculus
4. join calculus

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