• Question: what does financial engineering entails

    Asked by 586bm1926 to Peter, Jonathan, Grace, Doris, David, Ann on 7 Jun 2019.
    • Photo: Peter Macharia

      Peter Macharia answered on 7 Jun 2019:


      The program will prepare a student for a career as a Financial Engineer, concerned with the construction of models and application of financial theory and instruments in formulating solutions to financial problems as well as exploring financial opportunities. Students will use statistical methods to identify, quantify and develop various strategies to mitigate against the financial risk

      source: http://www.jkuat.ac.ke/departments/statistics/bsc-financial-engineering-2/

    • Photo: Grace Kago

      Grace Kago answered on 7 Jun 2019:

      Financial engineers “use their skills to predict how stocks and other financial tools will perform, to manage portfolios and to assess the risk of investments. They use math and computer science to build models of trends in the stock market. They have an extensive knowledge of the theory of finance and of the historical behaviors of specific markets. Using this knowledge and their computer skills they create simulations so that clients can see how certain investments are likely to perform. Based on his or her models, and realizing that the stock market sometimes acts in unanticipated ways, the computational analyst advises clients on how to manage their stock portfolios. Many of these professionals work in risk management in CVE, or credit valuation adjustment. Simply put, they determine the likely risks of an investment and, depending upon the amount of risk the client is willing to take, design an investment profile for the client that includes stocks of differing security. Some clients are willing to assume more risk because the return on these investments is usually higher, while others want moderate-to-low risk investments. Computational analysts work in insurance companies, hedge funds, in asset management, in proprietary trading and in banks.”
      Source: https://www.master-of-finance.org/faq/what-does-a-financial-engineer-do/