SERVING THE QUANTITATIVE FINANCE COMMUNITY

 
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quantstudent1111
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Economics via Distance learning worthwhile for me? Kindly pour in ur inputs..

July 5th, 2011, 4:42 am

hello everyone,I am a financial engineer (MFE) and have cleared CFA level 1.. Have less than a yr of work ex...Was wondering whether a distance learning economics course would be useful for my profile.. came across a couple of coursessuch as diploma in economics from LSE and MSc. Finance (Major :Economic Policy) from university of London.. However, I am contemplating whether I should just go for a MBA after 3-4 yrs of work ex , or add some qualification of economics too in my profile..Which are some of the reputed distance learning programs available..All your suggestions are appreciated.. Thank you..
Last edited by quantstudent1111 on July 4th, 2011, 10:00 pm, edited 1 time in total.
 
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AbhiJ
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Economics via Distance learning worthwhile for me? Kindly pour in ur inputs..

July 5th, 2011, 6:26 am

Try to get good work experience. Work ex trumps all.
 
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quantstudent1111
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Economics via Distance learning worthwhile for me? Kindly pour in ur inputs..

July 5th, 2011, 6:34 am

yes, thinking of pursuing it , if at all alongwith work...
 
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nyasha
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Economics via Distance learning worthwhile for me? Kindly pour in ur inputs..

July 5th, 2011, 2:28 pm

Someone I know did the LSE distance course and got a place on the Masters programme in Economics at Oxford. Having said that, she got a first from Cambridge (albeit in Natural Sciences) so maybe the entry to Oxford was more a reflection of that than the LSE distance course. But if you're interested in learning more about economics in general, then by all means enroll. It won't be as directly useful for your career as a Financial Engineer as say, finishing the CFA and maybe doing something else like the FRM, but it seems you enjoyed the economics part of the CFA level 1. There's no such thing as a linear path for your career - I personally think you should follow what you're really passionate about, and if something strikes you as being interesting, then follow it. You're much more likely to succeed if you're doing something you're interested in. Having said that, AbhiJ's recommendation is a good hedge.
 
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traderjoe1976
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July 5th, 2011, 4:24 pm

There is a lot of intuition in Economics which you cannot learn from the textbooks.Economics is useful only if you want to do Finance PhD or else work in World Bank / IMF type job. It will not help in quant finance job (maybe market microstructure area or econometrics).If you want management position MBA is much more useful than Economics masters.
 
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quantmeh
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July 5th, 2011, 5:09 pm

QuoteOriginally posted by: traderjoe1976Economics is useful only if you want to do Finance PhD or else work in World Bank / IMF type job. It will not help in quant finance job (maybe market microstructure area or econometrics).it's not true.
 
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quantstudent1111
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Economics via Distance learning worthwhile for me? Kindly pour in ur inputs..

July 5th, 2011, 5:27 pm

Hi Quantmech.. Can you please elaborate...?
 
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quantmeh
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July 5th, 2011, 6:00 pm

QuoteOriginally posted by: quantstudent1111Hi Quantmech.. Can you please elaborate...?i don't think that you can do anything original in finance without very solid understanding of microeconomics. you can certainly implement all the known stuff in code though.
 
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nyasha
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July 6th, 2011, 12:45 pm

QuoteOriginally posted by: quantmehQuoteOriginally posted by: quantstudent1111Hi Quantmech.. Can you please elaborate...?i don't think that you can do anything original in finance without very solid understanding of microeconomics. you can certainly implement all the known stuff in code though.Economics underpins quant finance, you can derive the major option pricing theories from an understanding of utility functions. All finance is essentially a subset of economics. So if you really want to know the 'rigorous' explanations behind the pricing techniques, rather than just the assumptions of no-arbitrage etc, you will get the big picture view from knowing economics. Economics attempts to put a humanistic face to the models, explaining them in terms of agents' (people, companies and market actors) behaviour rather than the technical assumptions about the market. Its arguable that no quant finance models are valid without an equivalent derivation from ground-up microeconomics. This is often the ultimate test of a quant finance model, because the microeconomics-based path to a pricing equation is often distinctly different and sometimes considered more robust, partly because it belongs to a much broader and older canon of principles, but mostly because it adds behavioural intuition to the distributional assumptions and technical basis of the quant finance approach to modelling. Having said that, you won't learn financial economics to a high level until an advanced stage, you may see only basic elements in a postgrad diploma. The real value comes from doing higher level, eg Masters and PhD Economics. Economics also has a lot more breadth and potentially, depth than quant finance. You can bring in lots of different elements from different disciplines, whilst in quant finance you would usually look at issues in a very technical (ie how do we model the maths) way. I'd say getting a PhD in Economics, if you can hack it, is very worthwhile. I personally find it a bit of a headf**k - quant finance is so much more finite. Economics will drive you crazy with all the theories and countertheories. Even at postgrad level it will consist of a lot of stuff you may be less interested in, and that is the major hurdle you have to overcome. Having said that, you survived possibly the most boring exposition of Economics that there is, which is the CFA level 1, so if you're still motivated then that's a good sign.
Last edited by nyasha on July 5th, 2011, 10:00 pm, edited 1 time in total.
 
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quantmeh
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July 6th, 2011, 2:21 pm

QuoteOriginally posted by: nyashaI personally find it a bit of a headf**k - quant finance is so much more finite.if you're not fun of headf**king, then PhD Fin is an option. there's too much irrelevant stuff in Econ PhD to me
 
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twofish
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July 12th, 2011, 9:41 am

QuoteOriginally posted by: nyashaEconomics underpins quant finance, you can derive the major option pricing theories from an understanding of utility functions.Not true. Assuming a utility function exists imposes mathematical constraints on the option prices that you can get, and there are examples I can think of in which those assumptions are violated. In particular, if you just assume utility functions you can't get option prices that depend sensitively on liquidity. Also you can't get momentum effects from utility functions.QuoteEconomics attempts to put a humanistic face to the models, explaining them in terms of agents' (people, companies and market actors) behaviour rather than the technical assumptions about the market.But then they hand-cuff themselves by restricting the allowable models for agent behavior.QuoteHaving said that, you won't learn financial economics to a high level until an advanced stage, you may see only basic elements in a postgrad diploma. The real value comes from doing higher level, eg Masters and PhD Economics. I call BS. Maybe I'm missing the cool stuff, but most of the stuff I've seen published is pretty much non-sense.QuoteEconomics will drive you crazy with all the theories and countertheories.With truth determined by academic politics rather than reference to external observation.I have pretty low opinions of much of what economists do. Every time you mention that "this doesn't make sense, isn't very useful" you obviously are an unwashed outsider that couldn't possibly understand the greatness that is economics. Fine. I'll leave the party, but without outsiders pointing out how useless some of this is, what ends up happening is you have a small group of people telling each other how brilliant they all are.
 
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capafan2
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July 12th, 2011, 2:48 pm

Quotewhat ends up happening is you have a small group of people telling each other how brilliant they all are.Funny-Is'nt how lot of small groups in all organizations work. A small set of politically influential people tell each other they are brilliant while the even smaller group of outsiders is expected to show a gaping admiration for them.
 
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twofish
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July 13th, 2011, 12:47 am

QuoteOriginally posted by: capafan2Funny-Is'nt how lot of small groups in all organizations work. A small set of politically influential people tell each other they are brilliant while the even smaller group of outsiders is expected to show a gaping admiration for them.It gets interesting when different groups collide. It also gets interesting when money is involved. I'm willing to swallow my pride and say good things about the work that is being done in economics if it means getting a bigger bonus, but except for a few bits (econometrics and statistics and some institutional economics), what is coming out of economics schools is pretty close to useless, and people get offended if you mention that.Even if you try to be polite, and have a decent conversation (i.e. to explain *why* no one uses utility curves in actual trading and *why* the statement that you can rigorously derive all major option models from utility curve models is both wrong and useless), people aren't interested.But that doesn't mean you shouldn't learn the stuff. If you say "this is BS" then people will sneer at you and complain that you don't really understand the stuff. If you take a few courses you can say "in my educated opinion, this is BS" at which point people will *still* sneer at you and complain that you don't really understand the stuff, and at which you can roll your eyes, leave people to their navel gazing and then get on with your life.
 
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twofish
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Economics via Distance learning worthwhile for me? Kindly pour in ur inputs..

July 13th, 2011, 12:49 am

Last edited by twofish on July 12th, 2011, 10:00 pm, edited 1 time in total.
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