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What are the differences between the M.Eng and the MS in engineering?

What are the differences between MS. Financial Engineering, MS. Finance and MBA Finance?

  • Parameters: 1. Course-content 2. Prerequisites 3. Career opportunities

  • Answer:

    I looked into a variety of these programs before attaining my current job. Briefly I would brake them down as follows: MSc. Financial Engineering: A highly quantitative degree program focused on the use of financial calculus, computer science, and the study of derivatives. Students pursuing this degree will likely have had to derive the Black-Scholes equation using Ito calculus, write programs to do basic ETL procedures, run a principal component analysis using eigenvectors, and develop hedging portfolios for various purposes. This is essentially an applied mathematics degree that focuses on problems encountered in finance. Graduates are ideally suited to work for hedge funds, quantitative financial groups, and risk management teams. Linear algebra  calculus, and computer science classes are the typical prerequisites. MS. Finance: A not strictly quantitative degree program that focuses on the theory and practice of finance--a sub-discipline of economics. A student in one of these programs would have a large range of choices of topics to be learned, as long as they fall under the umbrella of finance. Students in these programs would likely know a bit about everything including growth economics, exchange rate paradigms, behavior of statistical distributions, valuation of equities, valuation of fixed income securities, portfolio theory, corporate finance, and financial reporting requirements. Graduates could work in financial consulting, work for the Federal Reserve Bank, go on to PhD programs in finance, or work in any variety of roles in the banking sector and otherwise managing money. Prerequisites could be as simple as a BS degree in any subject. MBA. Finance: Like all MBA programs, this degree would focus on preparing candidates to be valuable employees for a corporate setting. This means a lot of focus on working in teams, understanding organizational theory, and developing interpersonal management skills. Outside of this core curriculum, these students are differentiated by their electives, which would mainly be finance-related. MBA students would also have some access to highly mathematically finance courses, if their school offers a financial engineering program. However, an MBA in Finance would not necessarily be required to focus on the highly quantitative aspects of the field of finance to achieve their degree. Graduates would likely seek a job in investment banking, private equity, or perhaps venture capital. MBA programs typically require at least two years of work experience prior to enrollment, with few other formal prerequisites.

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I think the biggest difference is in quality of teaching between the two programs. The business school is a customer centric product which means that your opinion matters and the school makes an effort to ensure that you get reasonable value from your electives. The MSc Finance course is still very much an academic program. At the business schools when Professors teach you, they teach facing you. They interact, they ask questions, they focus on applications. In most non MBA master's program that are owned by the Mathematics faculty the focus is still very much on black board and chalk method of transferring knowledge. Having said that, the MBA is what you make it. If you take the right course work and dig out the right professors, you can actually create a program that works very well. However from a employer perception point of view, if you are looking for a heavy Quant role, you may perceived to be weaker candidate. Alternatively if you decide to opt for a weaker course load, you may be better off with the MSc. Here is the course work that I did at Columbia about a decade ago. If you notice you will see one PhD elective (that was impossible to pass but changed by life) and about 5+ heavy finance course including two that focused on derivative & option pricing. This is not a typical business school program but Columbia gave me the flexibility to design it the way I wanted it. I don't think you would get a similar structure at a Math school. http://financetrainingcourse.com/education/2010/08/mba-guides-my-mba-finance-course-work-at-columbia-business-school/

Jawwad Farid

Well I don't think I am fully qualified, but since you asked me to answer TWICE, I am glad to say my opinion :) MSc in finance is the same as BSc in finance only in 1 year:) Its just more compact and quicker (because you are grown ups now, so you can handle the pressure). I have and BSc Engineering degree and then I decided to do finance and basically after MSc finance I am as good as BSc in finance, maybe slightly better because it is a little more practice focused and little bit more advanced, with less useless crap. MBA in finance is exactly what it is - it is "business administration", so they will teach you MSc finance + operational side of the business (marketing, strategy etc". So it is better (and also longer) than MSc finance in a sense that 2 beds are better than 1. Financial engineering, as I said to you, is for math nerds - calculating futures/options, quants, DCF models etc etc. Which is bloody boring, but if you like math and you are good at it, investment banks will hire you - no problem.

Mark Savchuk

I would say that the masters in financial engineering will be a specialized degree and that the MBA (with emphasis in Finance) is a generalist's degree. I would further say that your career opportunities with a masters in financial engineering will be more circumscribed than those you are likely to have with an MBA. Coursework in an MBA will be broad and wide (including various functional emphases like marketing and management) while those in the finance master will be narrow and focused. Think case-studies for the MBA; imagine spreadsheets and quantitative analysis with the MSc. If you aspire to be a manager or an executive or run your own company, then choose the MBA. It's about people and decision-making and organizational effectiveness. If you want a career in the financial sector, focusing on investments, financial products, fund management or financial management, then opt for the MSc. Your cohorts in the two programs will also vary widely: diverse and numerous with the MBAs and probably just a handful or very smart analytical types with the MSc. The upside potential is greater with the MBA; but I imagine salaries are a bit higher out-of-the-gate with the finance degree. Of course, this last point would be strongly conditioned by the MBA program you eventually land in.

James Fisher

1. Course Content:- MSc Financial Engineering focuses exclusively on Quantitative Finance with less/no subjects on areas such as Marketing, Org Behavior, HR etc while MBA Finance has a variety subjects which include ones mentioned above. 2. Prerequisites:- Both require a Bachelors degree. MSc Financial Engineering requires programming experience/knowledge, Calculus etc while MBA Finance doesn't require these. 3. Career Opportunities:- After MSc Financial Engineering, students can expect Hedge Fund, Financial Engineering, Algorithmic Trading  etc as their prospective areas while MBA Finance students can expect positions at Corporate Finance, Software companies etc. (Of course an MBA Finance guy can get into any of the other areas mentioned above, provided he has exposure & interest towards Quant Finance) In Short, you will learn basics of everything (with a focus on Finance) in MBA Finance. You won't learn much about derivations of complex financial models like Hull-White, Vasicek etc in MBA Finance. In MSc Financial Engineering, you will learn a lot derivatiions, derivatives and the maths part of finance industry, Structuring Financial Products, Credit Derivatives, Exotic Derivatives, Simulation of models on Excel/C++/C etc.

Aravind Madenur

MBA Finance focusses exclusively on Corporate Finance. Content: - Specifically topics such as Capital Budgeting, Asset Valuation (CAPM, Portfolio Theory), Cost of Capital, Capital Markets, Dividend Policy, Capital Structure, Equity/Debt Financing, Working Capital, etc. All areas that are relevant to running a large company. Prerequisites: - Basic math. Career Opportunities: - Managerial Positions - Management Consulting MSc Finance - cover the same subject matter, but you get access to units which cover special subjects in much more detail, such as derivatives, options, portfolio theory, M&A, international finance, banking, etc. MSc Finance is more suited to Investment Banking and Actuary jobs in my opinion.

Tom Pastro

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