Master in Finance: is it worth it?

Masters in finance are available at a multitude of Universities all over the World, including U.S. top schools. But is it worth it, especially in times of severe financial crisis?

Modern finance is a high-tech industry. The development of modern finance came in part from breakthroughs in research, including the Black-Scholes-Merton derivatives pricing model, the Cox-Ingersoll-Ross model of the term structure of interest rates and the Modigliani-Miller theorems on corporate valuation.

Modern finance requires increasingly sophisticated quantitative tools to assess and manage risks and returns. Mathematics play a large role in modern finance. A far cry from searching for payday loans on the web.

Centuries of history and experience have produced the fundamental theories about the way economies function, theories that all professionals use today to value assets. Mathematics comes into play because it allows theoreticians to model the relationships between variables and represent randomness in a manner leading to useful practical analysis.

A driving force behind these developments is the lively exchange of ideas between academia and the financial industry, a collaboration similar to the academic-private sector interactions routinely seen in engineering and the applied sciences.

Without adequate education in such subject, it is going to be very hard for you to compete with the hundreds of graduates who come out of Masters in Finance programs every year, such as Princeton University, NYU or the MIT Sloan School of Business.

Such programs are appropriate for recent undergraduates and for those who have several years of work experience in the finance industry or for engineers, computer programmers, mathematicians or physicists. They are particularly useful for other high-tech professionals seeking a career change into the finance world.

In addition to the traditional synergies among economics, finance and accounting, Master in finance programs exploit intellectual ties between finance and mathematics, statistics, operations research, computer science and engineering.

Although the programs do not require prior work experience in finance, in recent years having some exposure to finance such as an internship has been essential in an increasingly challenging job market. You need to stand out from the crowd if you want a chance to join one of these highly competitive programs.

Master in Finance programs in American Ivy League Schools are intended to prepare students for a wide range of careers both inside and outside the financial industry, including financial engineering and risk management, macroeconomic and financial forecasting, quantitative trading, quantitative asset management and applied financial research.

Normally the curriculum are designed to be completed in either two or four semesters, the length of study depending on the student’s prior knowledge of the field, mathematical aptitude and work experience.

While there has been much debate recently about the role of quantitative finance in the financial crisis, the financial industry has increasingly placed strong emphasis on quantitative tools and analysis as it seeks to rebuild itself and strengthen risk management practices.