About Financial Engineering?
What is Financial Engineering?
The fast-growing global field of Financial Engineering combines three disciplines:
Approximately 150 universities worldwide offer a degree in Financial Engineering or one of three closely related fields: Mathematical Finance, Quantitative Finance, and Computational Finance.
Why Financial Engineering?
As the financial world becomes increasingly complex, financial and non-financial institutions are actively working to manage risk—whether market risk (interest rate risk, equity risk, commodity risk, currency risk), credit risk (default risk and migration risk), or various types of operational risk, which can comprise thousands of correlated positions.
In investment banking, numerous intricate structures used to increase investor returns as well as reduce various types of risk have come to the market, such as CMOs (Collateralized Mortgage Obligations) and CDOs (Collateralized Debt Obligations). Mathematics and Computer Science are two critical tools for valuing and managing institutions’ complex risks and financial structures.
This is precisely where Financial Engineering comes in, applying Mathematics and Computer Science in order to value and reduce risks in the financial sector and thereby avoid, or at least reduce, financial crises.
Financial Engineering at Shidler
The Shidler College of Business offers a unique degree in Financial Engineering with a mission of excellence in research, education, the community, and the environment. Since Hawai'i's mid-Pacific location exposes our state and businesses to hurricanes and floods, the Shidler MFE program will also specifically focus on modeling, valuation, and hedging of weather derivatives. We are also one of the first MFE programs, which offer a course on correlation modeling.
The MFE program will operate in conjunction with related disciplines at the University of Hawai'i, primarily the Department of Mathematics, College of Information and Computer Science, and the School of Ocean and Earth Science and Technology (SOEST).
Who is Shidler?
The MFE program is tremendously grateful for unprecedented support from Jay Shidler, a Hawai'i-based entrepreneur, real estate investor, and philanthropist for whom the college is named. We are also proud to note that he is a University of Hawai'i at Manoa business school graduate, class of 1968.
