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Quantitative Finance

What is Quantitative Finance?

Financial engineers (Quant Analyst) are specialists who make use of mathematical formulae, programming and engineering methods in financial theories and analyses market trends to build data-backed financial models.

The primary responsibility of a financial engineer/ Quant Analyst is to have thorough knowledge of financial markets, its volatility and knowledge of financial theories. As a financial engineer/ Quant Analyst, you can associate yourself as an employee of any reputed financial institution or setup your own consultancy or do both.

Quantitative analysts use their mathematical and statistical skills to detect market changes. Advanced knowledge of calculus, engineering and game theory is key; programming skills are essential, particularly in C++. A strong background in modeling with large amounts of data is also mandatory. On a day-to-day basis, quantitative analysts should also be able to analyze trading performance and provide solutions to problems.

Their role can be summarised as below:

  • Understand market trends to make modeling decisions
  • Develop and implement complex quantitative models and analytical software/tools
  • Test new models, products and analytics programs
  • Work with the actuaries and software engineers of the organisation to create robust models for the various needs of the organisation.
  • Consult with financial industry personnel on trading strategies, market dynamics, trading system performance, etc.
  • Interpret Data and suggest ways in which the inferences can be used for the business.

How to be a Quant Analyst?

Being a quant analyst is a highly lucrative job and is needed at top-tier positions in the financial domain. To pursue careers in quants, the basic prerequisites are as follows:

  • Bachelor’s Degree in Mathematical Finance/ Computer Science/ Statistics: It is essential for one to be a graduate in one of the above degrees.
  • Learn important analytics, statistics and mathematics skills: Gain strong programming skills (C++, Java, C#, Scala, Python, etc) and getting comfortable with very large data sets is the key.
  • Gain your first entry-level quantitative analyst position: Experience is the best teacher and an internship helps in putting classroom theory into perspective.
  • Earn certification: Take up well recognised courses such as CFA, FRM, CAIA to build your financial knowledge.
  • Earn a Master’s degree in Mathematical Finance / Financial Engineering

Why become a Quant Analyst?

Average Salary with a CFA designation

$ 83,000/-

Source: Reports from the Bureau of Labor Statistics

Equity Research Analyst’s Salary

3 – 10 Lakhs

SOURCE: Payscale.com

Risk Analyst’s Salary

5 – 8 Lakhs

Source: Payscale.com

How does courses at IAQS compliment Quantitative Studies?

The degrees at IAQS compliment studies of various financial professional courses like CFA, CAIA and FRM which in turn enable an aspirant to take up Quants related roles. The curriculum has finance based modules which have individualised mapping with the curricula of the aforementioned courses.

Students after their penultimate year have an option to choose their elective of specialisation. The options for specialisation are:
1) Actuarial Science
or
2) Quantitative Finance.

If an aspirant opts for 2) Quantitative Finance he/she can be prepared to give CFA/FRM Level 1 and Level 2 and CAIA exams in the third year.

However, all professional courses for finance like CFA, FRM, CAIA are more so a distance learning program wherein students have to take exams every 6 months. This system clearly lacks a holistic learning.

To bridge this gap IAQS has built its courses not only to compliment finance based professional courses but also provide an overall platform supporting immersive learning by:

  • Capstone Projects and Case Studies:
    Students get a chance to try their hand at the application of classroom learning by way of specially crafted case studies.
  • Industry Experts:
    Industry integrated learning by having >60% of the faculty comprising industry practitioners. They give students perspective on how their learnings tie in with industry realities.
  • Mega Lectures:
    Once every semester we organise “Mega Lectures” where based on the theme of the semester we invite top dignitaries and people of senior management from the industry to discuss latest trends and current happenings in the industries.
  • Internships:
    Students are also exposed to industry realities with an opportunity to intern after their penultimate year.