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Course Selections for a Finance Career

I am occasionally asked by students which courses will increase one’s chances of getting a (good) job in finance and increase one’s likelihood of success in that job. Below are some thoughts. Other comments welcome.

1) It does not matter what major you are. As a concrete example, one of my summer interns from last year, Dan Gerlanc ’07, just started an excellent job at Geode Capital even though he majored in Comparative Literature. Geode did not care what his major was, but they did care (a lot) about his skill set. In particular, there is no advantage to being an Economics major (as I was). Very few of the economics courses at Williams have any direct application in the working world.

2) You must prove that you aren’t scared of math or computers. One way to do that is to take at a couple of classes in either, but that is not required. But few finance firms are going to want to hire someone that can’t deal with spreadsheets. It can be an advantage to take a bunch of MATH/CS classes, both to prove that you are numerical and to demonstrate your smarts. There are very few (any?) dumb CS or MATH majors at Williams. Employers know this.

3) The best classes to take are STAT. If you are even thinking of going into finance, or any sort of business, I urge you to take every STAT class that Williams offers. STAT 201 is a must. (Skip 101.) Courses like 341 and 346 will also be very helpful, although I wish there were more applied work in both. The best class to take this year, at least if you are interested in quantitative finance, is STAT 442T: Computational Statistics and Data Mining, a great topic, well-taught, with attention to all the messy details in the real world. I can’t recommend that class highly enough.

4) To take all those STAT classes, you will have to take some MATH. In particular, you need calculus through MATH 105/106 and linear algebra (MATH 211). The MATH Department is, as we all know, one of the best at Williams, but the vast majority of its other classes have nothing to do with a career in finance. But, if you like math, you should still take them all. Study what you love.

5) Before compiling this list, I had never seen MATH 373(S) Investment Mathematics. Is it any good? I think the world of the professor, Frank Morgan, and the topics covered are important. Highly recommended. Note that, if you are interested, you need to be taking Linear Algebra this fall.

6) Being able to make the computer do what you want it to do is important in finance and in business. While you do not need to take the intro CS courses (134 and 136), I recommend that you do so. It will help you get a job and, in all likelihood, make you better at the job you get. Then, if you like computer science, you should take more classes in the department, especially ones that involve building real programs (not theory) and getting your hands dirty with data. 319, 373, 315, and 374 all look interesting and educational.

7) What about economics? Well, I have nothing against economics and there are certainly many excellent professors. Despite my occasional digs, I am a big fan of professors like David Zimmerman and Ralph Bradburd. There are also many interesting courses. (ECON 458T(F) Economics of Risk and ECON 357T(F) The Strange Economics of College look fascinating. And, as always, you should take at least one tutorial every semester.) But are there any classes that will actually increase your chances of getting a finance job or your success in it? Not really. Being an Economics major does prove to potential employers that you aren’t scared of math, but an English major can do the same with a STAT course or two.

Other comments welcome.

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#1 Comment By AC On September 7, 2007 @ 8:04 am

Before going back to school, I spent six years trading bonds for a bulge-bracket investment bank and I think Dave supplies very sound advice. A couple of observations from my experience looking at resumes and interviewing candidates (both undergrad and MBA): I don’t think I can stress enough that a resume that does not demonstrate quantitative skills or interest really hurts applicants. Be sure to list any math coursework and highlight A-level grades. Do the same for science courses, especially physics. One reason math is so important is because the profit margins are collapsing in the traditional commodity type products (stocks, high grade bonds) and i-banks are turning resources to more complicated products and services: While the syndicate desk scrapes money out of a high grade bond deal, the swaps/swaptions desk is having much better luck with the margins available when handling the hedge or fixed/floating swap. Math skills are a necessary skill to get a foot in those doors.

Also don’t assume that basic computer skills are taken for granted. Be sure to list every computer skill you have on your resume…developing a thorough command of Microsoft Excel and its financial modeling capabilities is always useful as well.

As for selecting courses, I was an econ major myself and I can say that macro was a very useful course to have taken. Macro covers the inputs that drive interest rates generally; this is a good area to have some familiarity with when you start work in finance. Any opportunity to take a corporate finance class that introduces you to option valuation, discounting future cash flows and derivatives should be taken advantage of. Stats obviously is important, but investigate the offerings: Some stale teaching in the econ department at Amherst (thankfully some retirements have cured that) made my stats experience worthless, so be sure to pick the brains of upperclassmen who might have some color on who the best teachers are, instead of the ones who are just teaching the class to cover a hole in the course offerings.

One final thing…for after you graduate and start work. Investigate taking the 3-level exam to become a chartered financial analyst (CFA) before you think about business school. In my opinion, having CFA on your resume is a very powerful tool and has daily applicability to the world of finance (also an important credential if you want to go buy-side). In many circles, it does more than an MBA from a top school. An added benefit: You can study for it while working (and your company will often cover prep classes/materials), thus eliminating opportunity costs.

#2 Comment By (d)avid On September 7, 2007 @ 9:43 am

I provide very similar advice to my undergraduates about getting any kind of job — finance is just a subset. Very few employers care whether you have read Chaucer, know why the civil war was fought, or can explain photosynthesis. Moreover, every employer will plan on training you to do the details of your job. The important thing to do is show you have the baseline skills so that you can learn those details and do the job well. If you view your undergraduate education in instrumental terms and want to maximize your chances of getting a job, there are two (maybe three skills) that you can usefully acquire.

1) Foreign language skills: Set aside multi-national corporations for a moment. Even local governments and school systems are looking for people who can speak more than one language.

2) Quantitative skills: These are not only useful for many technical jobs, but they also serve as a signal that you are willing to tackle hard topics and are smart. I don’t think it matters whether the quantitative skills come from math, physics, computer science, or anywhere else.

2.5) Programming skills: I normally put these as a subset of quantitative skills, but some employers might view this set differently. If nothing else, it signals that you know how to work with computers and can learn new skills (and trust me, this is not true of many smart people — just ask IT people at any university).

The notable omission from this list is writing skills. Those are obviously essential to any job, so why didn’t I include them? They are assumed by most employers and no course of study will signal to employers that you know how to write well. I suppose if you are a math or science person, you ought to take a couple of humanities or social science courses to signal that you can write, but that isn’t much of a problem at Williams.

I don’t think this advice is antithetical to a liberal arts education. Being polyglot and well-versed in mathematics is part of a classical education. Furthermore, taking a few quantitative and language courses will hardly exhaust the credit hours you need to fulfill. And the advice is always in response to students who are asking how to get a job (and at ND, 1/3 of undergraduate major in business under the misperception this will help land a job).

#3 Comment By Henry Bass ’57 On September 7, 2007 @ 11:11 pm

Suppose you get bored with economics or finance as I did, and want to advance to something more creative like film making? The chief thing that helped me in this transition was Williams superb quality in oral communication 54 years ago. Rheteroic. Part of a liberal education since Cicero. And Williams was tops in this 54 years ago under the wonderful George Grantland Connolly, the best debate coach and speech teacher in New England.

Connolly was responsible for me beating Harvard in debate my first month at Williams. My debate partner, Jamie Humes, was later a speech writer for President Nixon. My sophomore year Connolly was on sabatical and the Harvard debate coach substituted for him. He was not half as good.

My frosh year Connolly took us to all the top NE prep schools. Tho I had come from a small school in the hills of Tennessee none of them was any problem, even discounting for the fact I was a year older. Alas, these times are over. Williams no longer aspires to being better than Harvard in oral communication. Hell, we even sometimes beat St. Peters, home of the best scholarship lawyers to be.

If Williams had any sense they would have endowed a chair in speech for Connolly.

Many folks have lovely careers but get bored mid-career. What stops them from escaping from the back room is the lack of superiority in oral communication.

In general, however, I agree with David and the others. Math is important. Especially applied math and statistics. And theoretical economics, especailly international economics and economic dynamics. The actions of the Japanese central bank on leveraging 30 year US T bonds and 90 day bills does affect us. You need to be able to think about this as tho it were easy.