Economics+Math+Programming

[EugeneT]

From reading posts it seems that FE requires quite a bit of knowledge in all three. I am an undergrad student and i was wondering how people manage to take soo many classes. I was a psych/phil major so far but i plan to switch to business due to financial prospects and my registration appointment is coming up. Can someone direct me in what classes i should take first and what should be my major/s to leave as many doors open as possible. As i am new to the business field, i am not 100% sure what i want to do so ideally i would want to take classes that would help me decide first or at least not limit future prospects. Thanks!

[Sanket Patel]

From my experience, most of undergrad Econ. courses won't teach you much that will be relevant for FE. There are however, a few courses which I highly recommend: Game Theory, Econometrics, and Mathematical Economics.

In my case, about 45% of my economics education came from Game Theory and Mathematical Economics. Most of the undergrad econ classes don't employ math beyond Algebra 2. That is where Mathematical Econ. comes in...it's a calculus based econ course that delves deeply into static optimization. If not for the economics, you should take this course for the exposure to optimization. I'm not sure if all schools offer a Math. Econ course, but I would imagine they do.

Game Theory is useful in gaining some analytical skills. Econometrics is a must-have - especially since you are likely study some form of Time Series Analysis in an FE program.

If you really want to learn economics in a way this will be useful in FE, try to sit in on a graduate level Financial Economics course. I was fortunate enough to sit in on one last semester and that is where I learned the remaining 55%. The Fin. Eco. course will shed a lot of light on Aritrage Pricing Theory by way of General Equilibrium Theory. The Fin. Eco. course will expose you to the very foundations of Financial theory.

Hopefully this was somewhat useful!

[Sanket Patel]

Also...I imagine most Econ programs offer some form of an Economic Forecasting course. Econ. Forecasting paired with Econometrics will serve as perfect intro to Time Series Analysis. In my Econ. Forecasting we delved into all sorts of models and topics...ARMA, ARIMA, VAR, GARCH, Unit-Roots, Co-integration and such. Given the nature of the course, you'll end up using some type of stat package on the computer. I was introduced to R for the first time in that course.

[Yuriy]

I would say Math + Finance + Programming + many other things. You don't really need to know much economics to become a financial engineer. What you need to know is a lot of math.

My advice would be to take as many math courses as possible starting from Calculus, Linear Algebra, Differential Equations, Probability and Statistics, and anything else you can take. Also, familiarize yourself with programming languages, take at least one semester of C++. One semester of Intro Finance is also good to have.