Program in Finance
- Markus K. Brunnermeier
- Mark A. Aguiar, Economics
- Sanjeev Arora, Computer Science
- Yacine Aït-Sahalia, Economics
- Alan S. Blinder, Economics
- Markus K. Brunnermeier, Economics
- René A. Carmona, Oper Res and Financial Eng
- Natalie Cox, Economics
- Jianqing Fan, Oper Res and Financial Eng
- Harold James, History
- Jakub Kastl, Economics
- Nobuhiro Kiyotaki, Economics
- Moritz F. Lenel, Economics
- Ernest Liu, Economics
- Ulrich K. Mueller, Economics
- Arvind Narayanan, Computer Science
- Jonathan E. Payne, Economics
- Mykhaylo Shkolnikov, Oper Res and Financial Eng
- Ronnie Sircar, Oper Res and Financial Eng
- Mete Soner, Oper Res and Financial Eng
- Robert J. Vanderbei, Oper Res and Financial Eng
- Mark W. Watson, Schl of Public & Int'l Affairs
Under the auspices of the Bendheim Center for Finance, Princeton undergraduates concentrating in any department may earn a certificate that attests to their proficiency in the discipline of finance. The rapidly developing field of finance focuses on the pricing of financial assets, including equities, bonds, currencies, and derivative securities; portfolio management and the evaluation of financial risks; banking and financial intermediation; the financing of corporations; corporate governance; financial-market and banking regulation; and many other topics. In addition to the obvious practical relevance of finance, the field contains both challenging intellectual problems and a distinctive formal framework within which those problems can be addressed. Knowledge of modern finance is also essential to the proper understanding of many other topics in economics and public policy, including the determination of exchange rates and international capital flows, the making of monetary and fiscal policy, the role of financial reform in developing and transition economies, the regulation and taxation of financial markets and financial instruments, and antitrust policy. Finally, modern finance is remarkably eclectic, drawing from many disciplines besides economics, including mathematics, operations research, engineering, computer science, psychology, politics, and history.
Admission to the Program
Students normally enter the program at the beginning of their junior year. All Princeton students can apply to the certificate program as long as they have taken the necessary prerequisite courses. About a third of the students who have earned the certificate in the past have come from home departments other than Economics or Operations Research and Financial Engineering (ORFE).
Interested students must submit a completed application online by May 31 of their sophomore year to the program. If you’re a sophomore applying for admission by May 31, you should select your courses in April assuming that you are going to be admitted. You will receive admission decisions by July 31. At that point you can change your course selection if needed.
Interested students must submit a completed application form by May 31 of their sophomore year. See the Program in Finance website for more details.
As economic theory, mathematics, and probability and statistics are pervasive in modern financial analysis, completion of the certificate in finance requires mathematical ability and preparation. The following foundation courses, or their equivalent, are required for admission into the program and (except as noted) must be completed by the end of the sophomore year. All courses require a letter grade (pass/fail not allowed).
- Mathematics: Students must take one of: a) MAT175 b) MAT201 and MAT202 or equivalent EGR154 and EGR156 or c) MAT203 and MAT204. MAT 201 and MAT 202 are both strongly advised, though only the higher of the two grades is recorded for the purpose of fulfilling the entry requirements. Students who choose to fulfill this requirement by taking the one-semester MAT 175 will be responsible for mastering the linear algebra part of the curriculum on their own.
- Economics: ECO300 OR ECO 310 (Microeconomic Theory: A Mathematical Approach)
- Probability and Statistics: ORF 245 (Fundamentals of Engineering Statistics), or ECO 202 (Statistics and Data Analysis for Economics), or PSY 251 (Quantitative Methods), or SOC 301 (Sociological Research Methods), or POL 345 (Quantitative Analysis and Politics), SPI 200 (Statistics for Social Science) or PHY 301 (Thermal Physics) and PHY 312 (Experimental Physics), or a score of 5 in AP Statistics.
Program of Study
- A total of five courses, at level 300 or higher. All students must have a minimum grade of C+ averaged over the core courses, the elective courses, and the independent work.
- The two core courses, ECO 362 (Financial Investments) and ECO 363 (Corporate Finance and Financial Institutions), typically completed during the junior year.
- Three electives chosen from the two lists of elective courses found on the program's website. List 1: Financial Applications, and List 2: General Methodology for Finance. ECO and ORF majors must take at least two of their three elective courses from List 1. All other concentrators must take at least one of their three elective courses from List 1. The program representative can approve a coherent plan of study that involves elective courses outside the preapproved lists.
- Independent Work Requirement:
The preferred way to satisfy the independent work requirement of the certificate is for a student’s senior thesis, in their chosen concentration, to include significant finance content, meaning that a substantial component of the thesis (at a minimum a separate chapter of the thesis) involves issues or methods drawn from finance.
If there is no possibility of including finance content in a student’s senior thesis, a separate, shorter piece of independent work is required. Students should consult with the BCF academic administrator to discuss this possibility and receive approval to satisfy the IW requirement in the form of either:
- A junior paper, written in the student’s department, which contains significant finance content.
- An independent paper, completed during the student’s senior year, which must be about a finance topic. Independent papers should be at least 15 pages long.
Students may use the same independent work, including senior thesis, junior paper, or independent paper to fulfill the finance certificate independent work requirement plus one other (department’s requirement, or a different certificate’s requirement), but not more than one other.
Certificate of Proficiency
Students who fulfill all the requirements will receive a certificate upon graduation.
Sample Elective Selection. Elective courses may be selected either according to individual needs and preferences, or to conform to one of five suggested tracks, listed below. These tracks are intended to be illustrative of coherent courses of study that students might choose. It is not necessary for a student to designate or complete a particular track to satisfy the certificate requirements.
Mathematical Finance Track
Students in this track study the mathematics of financial price theory, including stochastic calculus and its applications to arbitrage and equilibrium in dynamic economies. Relevant courses include ECO 317, 414, 465, 466; MAE 305, ORF 309, 311, ORF 515.
Corporate Finance Track
Students in this track study issues such as the choice and financing of investment projects, firms' determination of dividend policy, optimal capital structure, financial reorganization, mergers and acquisitions, and the management and regulation of banks and other financial institutions. Relevant courses include ECO 317, 342, 361, 464, EGR 491.
Derivatives Pricing and Risk Management Track
Students in this track focus on the determination of the prices of options, futures, and other derivative securities, and on the management of their risks. Relevant courses include APC 350, ECO 312, 463, 465, 466, 491; ORF 309, 335, 405, 435, 474, 515.
Investment Management Track
Students in this track study the design and functioning of asset markets around the world, the theory of optimal portfolios, the behavior and determinants of asset returns, and techniques of portfolio management. Relevant courses include ECO 311, 342, 353, 461, 462, 463, 464, 465, 466, 492, 493; ORF 307, 311, 405, 435; SPI 340.
Information Technologies for Finance Track
Students in this track study the computer-based technologies that are becoming increasingly important in finance, such as the design of efficient trading systems, algorithms, interfaces and large databases, and the security of computer networks. Relevant courses include COS 318, 333, 423, 432, 436, 461, ECO 461; MAE 305.
Behavioral Finance Track
Students in this track study how human psychology, including many documented behavioral biases, influence financial decision-making and ultimately asset prices. Relevant courses include ECO 462, 467, 468.
Finance and Public Policy Track
Students in this track study the interaction between finance and policy, including public finance, response to financial crisis, central banking, and securities law. Relevant courses include ECO 361, 491, 492, 493; SPI 340, SPI 466, 582F.