MS Finance vs MBA vs MFE?

[chris lake]

All,
What does everyone think of each of these degrees? I'm seriously trying to decide which one to go for but am not sure as to which one has the most opportunities?

I thought I wanted to do an MFE but after doing some research on the internet the last couple of months, it seems like the competition for jobs is quite intense and you need to have extremely good math skills? I wouldn't say my math skills are bad but they are not EXCELLENT i mean i'm pretty confident that they are above average. I come from an engineering background (electrical engineering to be precise - digital signal processing) and am confident of my analytical skills and from the research I have been doing it seems like the M.S in Finance program is more suited to me. Probably even an MBA.

I have some idea about MBA and MFE but haven't heard much about M.S Finance degrees... are these in demand? What kind of opportunities exist for this degree and is the competition as fierce as for MFE?

Thanks in advance for the help!
Chris

 

[finssite]

All,
What does everyone think of each of these degrees? I'm seriously trying to decide which one to go for but am not sure as to which one has the most opportunities?

I thought I wanted to do an MFE but after doing some research on the internet the last couple of months, it seems like the competition for jobs is quite intense and you need to have extremely good math skills? I wouldn't say my math skills are bad but they are not EXCELLENT i mean i'm pretty confident that they are above average. I come from an engineering background (electrical engineering to be precise - digital signal processing) and am confident of my analytical skills and from the research I have been doing it seems like the M.S in Finance program is more suited to me. Probably even an MBA.

I have some idea about MBA and MFE but haven't heard much about M.S Finance degrees... are these in demand? What kind of opportunities exist for this degree and is the competition as fierce as for MFE?

Thanks in advance for the help!
Chris

Hi Chris,

This is a good read:
http://www.princeton.edu/~bcf/MFinMBAArticle.pdf

Shakti

 

[Dmytro]

there's a whole bunch of QN threads on this topic:
https://www.quantnet.com/threads/becoming-a-trader-mba-vs-mfe.893/
https://www.quantnet.com/threads/mfe-after-phd-phd-after-mfe-and-related-questions.613/
https://www.quantnet.com/threads/mfe-or-che.901/
https://www.quantnet.com/threads/masters-in-finance-instead-of-mfe.876/
https://www.quantnet.com/threads/mba-after-mfe.391/

 

[Wallstyouth]

All,
What does everyone think of each of these degrees? I'm seriously trying to decide which one to go for but am not sure as to which one has the most opportunities?

I thought I wanted to do an MFE but after doing some research on the internet the last couple of months, it seems like the competition for jobs is quite intense and you need to have extremely good math skills? I wouldn't say my math skills are bad but they are not EXCELLENT i mean i'm pretty confident that they are above average. I come from an engineering background (electrical engineering to be precise - digital signal processing) and am confident of my analytical skills and from the research I have been doing it seems like the M.S in Finance program is more suited to me. Probably even an MBA.

I have some idea about MBA and MFE but haven't heard much about M.S Finance degrees... are these in demand? What kind of opportunities exist for this degree and is the competition as fierce as for MFE?

Thanks in advance for the help!
Chris

If you dont like programming, math, and especially technology avoid an MFE like the plague.
As for MBA vs MS in Finance these days your MS in finance will probably give you more opportunities in many business areas. MBA seems to have lost its clout over the years. ITs mostly useful for professionals who are looking to break into more front office type roles.

 

[Andy Nguyen]

I think MF, MBA and MFE are 3 subsets of the whole finance field.
Let (MF = A, MBA= B, MFE = C)
(B \bigcap C = \emptyset )
(A \bigcap C = \text{(structured products)} )
(B \setminus C = \text{ (corp finance, management, case study)} )
(C \setminus B = \text{ (math, programming, structured finance, derivatives)} )

You can take elective courses that cover things in other degree. In MFE program, you can take courses in Microeconomics, Management for example. Some programs will give you enough flexibility to tailor the courses to your liking.

MF and MBA have plenty of overlap when it comes to job opportunities. MFE takes on a very niche market and will replace some of the positions previously available to MBA. If math, programming is not your cup of tea, then MF and MBA are better suited.

 

[kean]

If you run through various quant finance or finance forum, you find that people asking the same questions:

1. Which QF program is the best?
2. Can I switch career?
3. Can I get a job after graduation?
4. MBA or MFE or CFA?

I think many people like to think "may be" using quant finance route to enter trading. Secondly, finance jobs are harder to get. Networking and relationships are very important to succeed in Finance. In this case, new grduates want to get higher pay and the job outlook has to be sexy. So, Quant Finance obviously looks sexy indeed.

However, I think we need to draw a line to ask ourselves honestly what do we want to do or want to be in the next 5 years or the rest of our life. My personal point of view is that Quants are well suited for rocket sciencetists. This is a fact. Even a top notch MFE program can't beat any Phd in rocket science in terms of maths. So, C++ programming comes in. If you are good in C++ with some maths you learns from MFE you may or probably break into the field becomes a junior quant.

Frankly speaking, I still believe that quant finance is a practical subject. We learn almost all neccessary tools during undergraduate from calculus, d.e, pde to analysis. Phd is very focus on a particular reasearch in a specific areas. You won't be surprised that undergraduate also covered stochastic calculus, probability and stats in details. These goodies can actually do the QF job.

With due respect, I think MFE is just like MBA. A career switching tool for engineers or technical personnel. Quants spend more tha 60% of their time to do programming. Another kind of programmer job in finance perspective.

Being a trader, you really need guts, not everyone has it. Similarly, even smart people they can't do programming. So, you need to know what really want in finance otherwise you will just wasting your time like I do in the first year. Personally, I think do something to get into the door is more important. Princeton program to me is one of the best. Second choice may be LBS Master in Finance. However, Baruch program will prepare you a job in view of the location, great contents, best course director I have ever seen to go all out to help students...so think firsst.

Cheers and best of luck.

 

[Yuriy]

MS in Finance is somewhere between MBA and MFE.
As it was pointed out, if you are not friendly with math, MFE is not for you. If you are not friendly with management and interaction with people, MBA might not be for you either.

If you want to do MS in Finance be prepared to learn Corporate Finance and other interesting subjects. You won't have much math but will need to learn how corporations work, how exchanges operate, how the world economy operates, and other things. Do you like it? Or would you rather design a model and figure out a possibility of making money on your own?

 

[kean]

If you want to do MS in Finance be prepared to learn Corporate Finance and other interesting subjects. You won't have much math but will need to learn how corporations work, how exchanges operate, how the world economy operates, and other things. Do you like it? Or would you rather design a model and figure out a possibility of making money on your own?

This is a mixed signal of how to make money. I want to point out one thing, option pricing is like casino gambling. Each trading strategy set-up by many parties - traders, lawyers, management and quant to model risk factors. I don't think anyone can make money from a model if you get some angels with millions to back up. That's why I think this sent a wrong signal to wannabe that they can make money after doing MFE using their own models. Yes or no. Essentially is making money for a firm. Retail players will most likely to lose at all time. Think about whether we can win over a casino...unless you become a casino??

Secondly, I think equity trading is easier to make money for any individual because initial outlay for investment is low. I think finance is getting more sophisticated. I believe it is about protectionism and office politics that created the scenario that "very advanced" maths are necessary to do the job. I would rather say advanced C++ will do the job. Due to the earlier day these positions were held by rocket scientists so it gave a mixed signal. If we do no have any stocks today, you may not even have option pricing unless using property or car as an underlying asset.

Raising funds we need good finance and accounting skills. Somehow, I don't deny that having good understanding about economics, modeling, time analysis and optimization may help to analyze markets. If we talk about finance and the money markets, quant is just a buzz and fashion like MBA in the 90's. MBA is too expensive so MFE is one year....low cost comparatively. Not everyone can afford a MBA from Harvard or Penn.:D

 

[alain]

Raising funds we need good finance and accounting skills

Correction, to raise funds you just need good communication skill, connections and a good track record... everything else is just "window dressing".

 

[kean]

True. Use the mouth more but you still need some finance knowledge.

Correction, to raise funds you just need good communication skill connections and a good track record... everything else is just "window dressing".

Please be specific. We assume this is a business deal. Communication and negotiation skills are key factors. I think in any business deal, we need to table accounting information though we can hire accountants. However, a businessman should know accounting in general. This should include trader otherwise CMU and other top schools will not include accounting in their curriculum.

If this is not a business deal. Using our mouth to get money...either we are borrowing from a friend or we are a con man.

True. Use the mouth more but you still need some finance knowledge.

 

[Yuriy]

This is a mixed signal of how to make money. I want to point out one thing, option pricing is like casino gambling. Each trading strategy set-up by many parties - traders, lawyers, management and quant to model risk factors. I don't think anyone can make money from a model if you get some angels with millions to back up. That's why I think this sent a wrong signal to wannabe that they can make money after doing MFE using their own models. Yes or no. Essentially is making money for a firm. Retail players will most likely to lose at all time. Think about whether we can win over a casino...unless you become a casino??

Well option pricing is not the only one thing studied in MFE.

Anyway, I was referring to purely theretical knowledge of how exchanges work vs. partially practical knowledge of how to build models that help (directly or indirectly) to make money

 

[kean]

True. MFE teaches other subjects too. However, the core is to teach derivatives - option pricing. Other subjects like financial econometric and finance is to complement the understanding of the markets.

I think we need to define models and strategies. What do you mean models in this perspective? Business models that make money? I would consider making money needs effective strategies.

At the end of the day, we need money to trade. I totally agreed with Alain. We need to use our mouth to convince backer to dump the funds. All these games are for big boys. Unless one can create a formidable network otherwise nobody will care to look at any models.


Do you know why banks like to hire MBAs to be traders? I think because they have guts. Some guys they dare to borrow hundreds thousands of dollar to study their MBAs at one of the top 10 not knowing that they can actually land a job to pay back. I call this gut.

Well option pricing is not the only one thing studied in MFE.

Anyway, I was referring to purely theretical knowledge of how exchanges work vs. partially practical knowledge of how to build models that help (directly or indirectly) to make money

 

[Yuriy]

True. MFE teaches other subjects too. However, the core is to teach derivatives - option pricing. Other subjects like financial econometric and finance is to complement the understanding of the markets.
I think we need to define models and strategies. What do you mean models in this perspective? Business models that make money? I would consider making money needs effective strategies.
At the end of the day, we need money to trade. I totally agreed with Alain. We need to use our mouth to convince backer to dump the funds. All these games are for big boys. Unless one can create a formidable network otherwise nobody will care to look at any models.
Do you know why banks like to hire MBAs to be traders? I think because they have guts. Some guys they dare to borrow hundreds thousands of dollar to study their MBAs at one of the top 10 not knowing that they can actually land a job to pay back. I call this gut.

This is where my personal view of the situation gets in the way. I personally don't like the fact that the core is supposed to be about pricing options. Sooner or later, even high school students will know how to price options.

By "models" I mean something like CAPM.

How about this: if we want to work on convincing people to do something, we get an MBA, if we want to work with CAPM-like models, we get MFE

 

[kean]

Alas..friend. You know I support your view. My reasoning is that making money can be in any forms. I reckon communication skills are far more important than any other skills in the business world. If business world is the super set, then the rest is sub-set.

CAPM is taught in finance and it is finance. FE job is to derive risk factors. It is part of the entire trading strategies. Business model is a structure. To execute this structure, we need strategies. After becoming a quant, I think any dude wants to starts their own hedge they need money. How to get it? from models, or from angels?

This is where my personal view of the situation gets in the way. I personally don't like the fact that the core is supposed to be about pricing options. Sooner or later, even high school students will know how to price options.

By "models" I mean something like CAPM.

How about this: if we want to work on convincing people to do something, we get an MBA, if we want to work with CAPM-like models, we get MFE

 

[chris lake]

Thank you all for the informative replies! Nice to see everyones thoughts on the issue.
Now here's another question:
I like Math, programming and technology! Sounds like I would like MFE but when I say Math, I mean I like calculus, linear algebra, diff eqs and such. Am I liking the 'right kind of math' ?
When I was in grad school, i sorta hated working with stochastic aspect of the signals and systems. Worked with blind source separation(not sure if anyone is familiar with that) and some speech recognition (which uses Markov models) - I HATE THESE..lol.

When i look up MFE coursework i see things like stochastic differential equations and it really makes me wonder if I would like it. What about the job itself? Will it be as hardcore as the concepts studied in school or are most of the situations encountered in real life pretty basic and fairly easy to solve?

As for now I think I'm still sticking to an M.S in Finance and surprised to hear it might open more opporunities than an MBA! Anyway once again, thanks for everyones input, it's helping me a lot!

On a separate note, hope everyone has a very merry Christmas and Happy New Year.
Cheers!
Chris

 

[kean]

Friend, I don't think anyone can answer your questions exactly. I mean, I might be in your same boat before.

About 20 years ago, a group of people became so rich through a program called MBA. Hence, many people followed the MBA route and they were hoping to get rich. 20 years later, the cost of investment is too high. Now, they have alternatives, these programs call Master of Finance and Master of Financial Engineering. So, other people start to jump ship and then follow the new routes......what about 5 years later you find another route calls Master of Making Me Rich (MMMR). Will you jum again?

I am like you before. At the end, I realise that I will do something that I really good at. I don't bother and I don't care what the rumours out there telling me to jump ship or not. I believe if we are good enough, we can reach the ultimate destination no matter how hard it is. You have to ask yourself a question. Are you a businessman or just an employee. Many people want to be a boss, but not many can make it. Entrepreneurship is part of you if you are one of them. It's in your blood stream. MFE may make someone rich, but may be not for anyone. Yes, MFE pays well but you may find MBA also pays well....then Mfinance pay wells too. Someone can program really well in C++, and he used to develop a trading system for a big firm but now he is making millions through ebay auction. God, can you believe that! This is real and I know this guy. He is selling jewerlly online through ebay.

How good you are is not important, really it is about how good you want to be. As a treasure hunter, you are the only one can solve your own puzzles. No ones except you. Good luck and I wish you all the best to making your dream come through in this coming new year.

When i look up MFE coursework i see things like stochastic differential equations and it really makes me wonder if I would like it. What about the job itself? Will it be as hardcore as the concepts studied in school or are most of the situations encountered in real life pretty basic and fairly easy to solve?
Chris

 

[Amanjain]

Hey , I am an Electrical Engineering (Electronics) student from India with a lots of interest in Mathematics. I thoroughly enjoyed statistics, probability, calculus, discrete math and am very comfortable with all math courses. I even took a course on Stochastic Calculus in my under-graduation and liked it a lot. But my programming skills are pretty average (Are the quants only doing programming all the time ?). So can anyone help me out as to which program would be best for me : MS FinEngg or MBA Finance? Are there equally good career opportunities for both programs in USA or Europe? Also, how hard is it to get into such programs if I only have an average GPA? (Please disregard the cost or length of the program while replying.)

My only dilemma is that are there enough jobs available for MS FE students and do I have to be a really good coder in order to do well ?

Thanks in Advance.
Aman

 

[Andy Nguyen]

Take a look at the QuantNet Guide where you can read on the differences between MFE and other finance type programs. Your technical/coding skill will be your biggest asset to get a job.

My only dilemma is that are there enough jobs available for MS FE students and do I have to be a really good coder in order to do well ?

No and yes.

 

[Tianyu Li]

Quite interesting topic. Because I am so "lucky" to hold an MBA and an MSF degree already, and try to apply for an MFE recently, I have to say I can offer some very "unique" suggestion.

For an MBA, it basically taught you how to see the business in a comprehensive perspective. It taught you every thing about business(accounting, supply chain management, corporate finance), polish your communication skills, and you have a lot of social activities. That's why most of MBAs go to consulting firms, venture capitals, or starting their own business after graduate - they are well trained to do that. A successful MBA needs to have great skills to deal with people and unique business insight.

For an MSF, it taught you a general idea about the financial market. It is much familiar with a CFA education: investment, corporate finance, accounting and portfolio management. The career path of an MSF is more close to an investment banker, but most of the MSF candidate are having no working experience before and (I have to say) are Asian candidates. So it is hard for them to find a good job in the recent years. In my opinion, a MSF program with good placement would probably be more quantitative and more like an MFE program, such as MIT.

For an MFE, it taught you more quantitative skills than an MBA or an MSF. An MFE program under a business school may have some overlap courses with MBA but that is not the point why someone goes to an MFE. I am not an MFE candidate right now but I personally feel that it is much more abstract and mathematical.

To make it more fun, I would say MBA deals with people, MSF deals with balance sheet, and MFE deals with model.

 

[Jayanthan]

Quite interesting topic. Because I am so "lucky" to hold an MBA and an MSF degree already, and try to apply for an MFE recently, I have to say I can offer some very "unique" suggestion

Thnx for sharing your experience. Out of curiosity! you have MBA, MSF, you are now going to have MFE. What would you additionally get from MFE which you didn't get from MBA or MSF. You might say, you would deal with models. How could one person deal with all three as u said, would that be even possible?

I am trying to pursue MSF or MFE since I dont have enough experience to pursue MBA, any of your inputs would be appreciated.