Will doing a Maths Minor help with a Finance major

[wardo11]

Hi, my name is James Ward and I am currently studying a BComm/BEco double degree in the Scholars Program and am in my 2nd year.

I have heard from a couple of friends and have read that some of the latter finance units - i.e. BFC3340 Options, financial futures and other derivatives - are quite maths intensive and difficult.

I've completed BFC2000 and BFC2140.

I was just curious for those who have either completed a finance major - or are quite a way through completing a finance major whether a solid maths background (like completing some maths subjects in the science faculty) would be beneficial. And I stress the word beneficial

Cheers guys!

Also to those who did principles of econometrics this sem: how terrible was the lecturer?!

[Rohmer]

I haven't done any maths units, but I did finish the finance major of my degree last semester, and I did it without doing a whole lot of maths (never was very good at maths, struggled through methods in HS). Pretty much the only units in the finance major that involve much maths are: (1) Debt Markets and (2) Options. I don't think maths units would really be that much use for either though. Never did Options/derivatives, though I think there is some calculus in it (vis-à-vis Black-Scholes) so I guess maths knowledge/ability could help with that. Overall though, I expect that maths units are focussed on different things, e.g. more advanced calculus, trig etc... (someone doing maths/sci/eng feel free to correct me here/clarify this). Doing maths units would probably make finance units feel rather easy, but I'm not sure they'd be very complementary or beneficial.

The thing with most finance units, is that there isn't a whole lot of 'maths'. There are numbers, but it's mostly about plugging those numbers into formula. The maths of a lot of finance units (Equities, International Finance, Property Investment, Pensions, Financial Analysis & Valuation, Advanced Corp Finance) is either of a similar difficulty to BFC2140 or not much harder. Options & Debt markets are basically the exceptions in terms of relying fairly heavily on calculations/maths.

[wardo11]

Ah thanks a lot!

Any finance subjects that you would recommend? Which did you take?

[Rohmer]

Depends what you're interested in & what you're good at, really.

If you want the more quantitative side, go for units like:

Options
Debt Markets
Modelling in finance
Econometrics units

I didn't really like the maths side much, so my favourite units tended to have less in the way of calculations. I thought Equities was quite good in terms of studying the share market etc. International finance was also interesting. Financial Analysis & Valuation was quite good as something of a bridge between Finance & Accounting, it was also a bit more of a practical unit (the main project is a group assignment where you prepare an actual valuation of a company). Pensions was fairly easy, although I didn't really find it that interesting...worth taking though if you were considering any sort of a career in banking/financial planning. Property Investment was ok; it was a bit harder than pensions (more calculations) but I didn't like it that much either tbh.

[keltingmeith]

Overall though, I expect that maths units are focussed on different things, e.g. more advanced calculus, trig etc... (someone doing maths/sci/eng feel free to correct me here/clarify this). Doing maths units would probably make finance units feel rather easy, but I'm not sure they'd be very complementary or beneficial.

So, high school maths is a pretty crap introduction to what maths is really all about (albeit it does teach some essential skills). See, there's three main variations of maths:

• Pure
• Applied
• Stats

Pure MAY be helpful, but it probably won't be obvious in how it's helpful. Applied may also be useful, but I doubt you'll need extremely tricky applied stuff for economics. Stats, however, will definitely be useful - if not now, then later on in life.

http://monash.edu/pubs/handbooks/aos/mathematics-and-statistics/ - this is all the maths subjects offered by Monash. If the unit has the code MTHx2xx, then it's a stats unit. Feel free to peruse and see if there's anything you like. Note, though: to do most stats units, you need to do MTH1030 and MTH2010/MTH2021 (I'd suggest MTH2010 myself, because I think it pops up more).

If you look through the maths subjects, you also notice that a lot of the stats units either have prohibited units with eco, or you can do them with eco background knowledge and little maths background. Note, though: while there are applications of stats in business and economics, maths units ARE maths units - they're going to be a lot more intensive than any non-maths unit in terms of the maths being done, and there'll be less focus on the business side of things.

You should probably ask TrueTears if you really want to know, but here's my perspective as a maths lover:
MTH2222 and MTH2232 are both very useful for a background knowledge in stats. If you want to see more applications rather than cool maths things, MTH3241 and MTH3251 will both cover applications in economics (MTH3241 only chucks it in at the end, but it's there, Kais loves his financial modelling) and you can get in with just ETC units.

[aes_999]

Doing maths units isn't really beneficial to the finance major if you're thinking of doing the hard 'quantitative side' of it (aka. Options, FAV, Debt. markets). I know someone who's on AN that does a maths major at Monash, and I can tell you they're 2 different things. But I will say that if you understand what the stuff that they put on maths units, you will understand the 'maths' in the quantitative finance units.

Rohmer's already discussed the rest.

[TrueTears]

Hi, my name is James Ward and I am currently studying a BComm/BEco double degree in the Scholars Program and am in my 2nd year.

I have heard from a couple of friends and have read that some of the latter finance units - i.e. BFC3340 Options, financial futures and other derivatives - are quite maths intensive and difficult.

I've completed BFC2000 and BFC2140.

I was just curious for those who have either completed a finance major - or are quite a way through completing a finance major whether a solid maths background (like completing some maths subjects in the science faculty) would be beneficial. And I stress the word beneficial

Cheers guys!

Also to those who did principles of econometrics this sem: how terrible was the lecturer?!

In short, AFC3340 is easily the best unit for BComm, it is the hardest (relative to all other BComm units), but definitely the most rewarding. Highly recommended this unit if you wanna learn something worthwhile in BComm (AFC3540 is the other highly useful BComm unit).

You will only need maths if you want to understand the indepth nature of AFC3340, otherwise basic maths will pull you through. However, mathematics is ESSENTIAL for finance, both in the industry and for academia. I'm not saying that everyone that works in the finance industry needs to know maths, no far from that, but the modern day financial markets cannot function without mathematics. E.g., think about the top level jobs that price complex derivative instruments, produce analytical risk models, etc, the people that work in those positions typically all have PhDs in financial engineering (ps, to work as a hedge fund analyst on wall street, a PhD in mathematics-related field is a preq from a top 20 US uni). In academia? Well you better quit finance if you don't know mathematics. Every top-level and successful finance academic is a mathematician.

Now as for completing the BComm degree at Monash. No, hardly any maths is required, BComm is not designed for mathematical students even those that want to continue on to honours.

Slightly off topic: by principles of econometrics do you mean ETC3400? That isn't offered in semester 1? I'm tutoring the this upcoming semester. Highly recommend any econometrics majors to do this unit. It is by far the hardest but best econometrics unit, alot of econometrics/maths honours students and even economics PhD students enrol in this unit. It's all about proofs and rigorous mathematics, which you hardly encounter in any other econometrics unit. Also Prof. Gael Martin is one of the nicest and most professional professors out there, don't miss out!