Master's level Finance courses-what do you really need to know?

I'm looking at getting a MS in Corporate Finance or Financial Investment Management. For those of you that have taken Finance courses at the Graduate level, do you have to be a mathematical guru to understand Financial concepts? Do you need a strong knowledge of Statistics and Accounting? I have no undergrad courses in Stats, Finance or Accounting and I consider myself weak in Math...Is this a bad idea? Does this mean I will just have to work harder or is there no hope for me?

Thanks

Rhonda

 

Also, do you think any one aspect of Finance...such as Corporate Finance, Investment Management, or Personal Finance is less math intensive than the other?

 

Good questions!

Rhonda,

For general Finance classes, knowledge of algebra is probably sufficient. However, for Investment/Portfolio Management classes I would expect that one would need more math. Portfolio management gave me fits and was the only class I got a B in during my MBA (although some was due to the poor syllabus and instruction). Calculation of beta, IRR etc. can be pretty complex.

For Accounting masters-level classes, I think they assume that the learner has entry-level accounting skills. You'll have to be pretty quick to pick it up at the same time that you are taking the class.

You could, if you're not taking any other intro classes, do some reading on the side prior to starting the MSM. That's what I did. Books such as "The Portable MBA" and "The Portable MBA in Finance and Accounting" and "The Portable MBA in Investments" or Barron's "Finance" are very useful prep, and are useful even when you're taking the classes for additional reference.

Knowledge of Statistics is necessary too including standard deviation and variance principals.

My kids have a computer Math CD set called "Math Advantage" that has Business Math and Statistics, which might be the way to learn some of these concepts. There may be others.

There are lots of helpful websites too, like the Chicago Board of Options. www.cboe.com Look under "Learning Center".

Good luck!

 

Thanks for your reply. Finance intrigues me, but I must say I am somewhat afraid of it!

Rhonda

 

In my previous job I was an advisor for an MS in Math Finance. SO I'm a little math-biased, but I think you will need at the minimum:

calculus (from a math dept - not a b-school)

statistics

a probability class that uses calculus (again, from a math dept, not a b-school)

 

Wonderful advice from the two members above!

Rhonda. To brush up on your math skills, try the resouces below:

http://www.free-ed.net

http://www.learner.org/

http://www.math.com/


Ray

 

I don't see a MS in Finance on Mountain State's website. Could you post a link.

 

It would be through their MS Interdiscipilnary Studies. You can develop your own course content with MSU's professors.

 

Although I only have a minor in business, I should think it worth your while to either get sylabi and textbooks used in the prospective courses you want to do, or else buy used related textbooks - they can be had dirt cheap at

Another way to gauge your interest and readiness is to test out of finance (DANTES - see www.getcollegecredit.com). Barron's Finance (Finance [Barron's Business Review Series]
by Angelico A. Groppelli, Ehsan Nikbakht, 2000) is usually touted on this board as the best self-study prep for the exam. (See reviews here http://www.amazon.com/gp/product/0764112759/qid=1138218465/sr=1-1/ref=sr_1_1/002-6940230-0400825?s=books&v=glance&n=283155)

Now, for a finance grad specialty, this would only be intro and a baseline competency - not the heights you would have to anticipate scaling thereafter. People better informed than I can give you an idea of what to expect.

But I agree - finance is interesting in combining math, accounting and law to enhance business performance. Good stuff! I say keep checking and evaluating before plunging in. Furthermore, get an interview with some folks in B-school now - or recently graduated - to get more input on expectations. Presumably, all it takes is effort and enough time; skills can be learned Ask friends, including people here, as well as the placement office at your local university. But none of your pre-application prep will be in vain! Study, test, evaluate - study, test, evaluate. Then you will know if it's truly doable for you.

One negative assessment of B-school comes from Chicago MBA grad Megan McCardle - her blog is at
http://www.janegalt.net/ (use "search" or scroll back in her entries.) She's addressed these questions a few times in recent months: loads of money, but boring grungy technical work is how she describes her post-MBA job on Wall Street (and especially those held down by her enthusiastic investment banking cohorts). She's happier now as journalist for The Economist.

I once dated a woman who studied and loved finance as an undergrad, earning her BS in the subject, then doing 401K investment for a large insurance firm. (In fact, one of her friend's husbands was a finance grad from Chicago, and her brother-in-law was CFO for Echostar, a leading satellite TV firm.) She inteviewed a relative who went to B-school and then worked for a Big Four accounting firm, but was dissuaded unless she was very very driven. A quite competitive field, something that's not for everyone, and not just technically speaking.

 

A couple of points here:
Yes, finance as a field can be lucrative or not, and boring or not.

Grads of other than tier 1 B-schools will have a hard time getting hired by big-name consulting firms or wall street firms. Even large accounting firms will be very picky.

That being said, Rhonda and others considering a finance degree and/or career should determine what they want to do, and can they get there with an MBA or MSM or whatever, and from what school.

There are tons of careers for finance majors, not just wall street jobs: Commercial Banking, both line and staff positions. Another option is Financial Analyst at medium sized or large corporations such as Boeing or Cingular or GE. Then theres's the CFO track, which would also mean a CPA, most likely. Teaching Finance at the college level. Insurance companies. Microsoft. There are plenty more ideas out there for career paths.

Boring is in the eye of the beholder, as it were, and so is whether or not a job is challenging. Rhonda doesn't tell us why she wants a MSM or what she's going to do with it.

I got my Masters to further my career as a Commercial Banker and as a way to get an adjunct position part-time, which I recently did

 

Finance is becoming increasingly mathematical. At the most basic level, a decent understanding of statistics and some facility with spreadsheets will get you by (barely). At the upper reaches, finance relies more and more on stochastic calculus. Wall Street firms are hiring more and more PhD level mathematicians and physicists these days to help develop models. Quantitative finance has morphed into financial engineering. In this field you need a very strong math background, as well as programming ability blah blah. I guess the bottom line is that, finance, is now a really broad area, and one size does not fit all anymore.

 

This has been my experience. Many very insteresting, challenging quant work is on Wall Street. But quant finance programs do not teach marketing, accounting, management like an MBA does. If you want a quant job, get a math or physics education. If you want a general management job, no need to study math beyond Stochastic Calculus.

 

To answer your question about why I want a MS in Finance: I currently work as a Cost/ Financial Analyst for a medium sized corporation, a Department of Defense contractor. I moved into my current position by a combination of luck and timing, but I do not have much knowledge of Finance outside of my daily work tasks. I feel in order to receive a promotion, or to do my job better, I should complete a MS in Finance program. Either that or switch careers to something I may feel more comfortable in, like Human Resource Management or International Business. Thanks for the replies...keep em' coming!

Rhonda

 

Based on what you say here, an MBA or an MS in accounting would make much more sense.

Your job title implies that you are doing managerial accounting work, not finance.

 

Long time lurker; first post.

A true MS in Finance, at a minimum, will involve algebra, linear algebra, calculus, mathematical statistics, cross-sectional and time series econometrics and some stochastic calculus. You will need to be familiar with algebra, linear algebra and calculus from the outset.

The math question aside, you should understand that Finance is nothing more (or less) than applied economics. And as such, Finance is as much art (read intuition) as it is science. You also should be prepared to take as many economics classes as you will finance classes.

Perhaps surprisingly, you probably will not be required to take any accounting courses. Although most people believe that accounting and Finance are closely related if not synonymous, in fact, they are unrelated. Accounting is concerned with measuring historical outcomes according to an arcane system of rules while Finance is concerned with the optimal and prospective allocation of resources through time in the presence of risk. Not a lot of overlap.

One more thing. Except for the MS in Mathematical Finance (the "quant" degree) most schools do not offer a stand alone MS in Finance. More typically, the degree is awarded upon completion of the course work and a qualifying exam in a Ph.D. program.

Ralph Sanders

AB, Duke University (Accounting)
MS, University of Rochester (Applied Economics)
Ph.D., SUNY Buffalo (Finance)

 

I agree with the above poster that if I am interested in a field closer to my current career, I should choose Managerial Accounting.

No, can I pose the same question about other business specialties? What level of math is required for Marketing, Entreprenuership, International Business, Human Resource Management and General Management?

Rhonda

 

While I'm not taking an MS in Finance, I am enrolled in an M.B.A. program and just finished Finance. The Managerial Finance class alone involved some statistical analysis and basic calc. So I imagine that an M.S. in Finance would include much more...

 

Horric,

What MBA program are you enrolled in?

Rhonda

 

I guess I'll have to make a sig. but, Ellis, NYIT! Technology Management Concentration.

 

There we go... This should do it!