By Katia Hua
•
September 30, 2024
Finance Finance, simply put, is the study of how individuals, organizations, and companies effectively raise, allocate, and utilize funds over a period of time. It is a discipline focused on capital management. Although economics and business studies also involve finance, a finance major delves more deeply into the field. Specific topics in finance include money, securities, banking, insurance, capital markets, derivatives, investment, and financial management. Finance is relatively math-oriented, requiring knowledge of advanced mathematics and statistics. Admission Requirements Students need a strong foundation in mathematics. For undergraduate applicants, it’s crucial to pay attention to your math grades. For master's applicants, you must have studied calculus, accounting, statistics, and basic economics during your undergraduate studies. Those with a liberal arts background can also apply for a master’s in finance, but it’s preferable to have taken courses in mathematics and business as minors. The undergraduate finance program takes four years. A master’s in finance usually takes one year and is highly practical. Career Paths Graduates can work as financial advisors, securities brokers, fund managers, or in private client services and mergers and acquisitions in investment banks, consulting firms, or commercial bank loan departments. The starting salary for a finance master's graduate from Vanderbilt University is around $86,000, while the starting salary for an undergraduate is relatively lower but still competitive. Financial Mathematics/Financial Engineering Financial Engineering is an interdisciplinary field that combines finance, mathematics, and computer science. It is also known as Mathematical Finance or Quantitative Finance. Financial Engineering involves the development of technical solutions to financial problems using engineering approaches, including financial product design, pricing, trading strategy development, and risk management. Courses are usually co-taught by the business school, mathematics department, and engineering school. Admission Requirements Due to the excellent job prospects, it is one of the most demanding majors in terms of background requirements. Students must have a strong foundation in mathematics and a solid programming background, including skills in C/C++, VBA (programming tools), MATLAB (modeling), and MAPLE. Many students majoring in financial engineering come from mathematics or computer science backgrounds. Humanities students can apply, but they must excel in mathematics and programming. If you don’t like math and coding, this major might not be a good fit for you. Career Paths Financial Engineering differs from Finance as it primarily trains technical professionals in the financial industry known as Quantitative Analysts, or Quants. Quants are primarily employed in investment banks, hedge funds, commercial banks, and financial institutions, where they work on developing and applying derivatives pricing models, programming, and risk management. Since Financial Engineering professionals are considered the gatekeepers (risk controllers) and brains (pricing and product modeling) of the finance industry, their compensation is quite high. For instance, the median starting salary for financial engineering graduates from Carnegie Mellon is approximately $136,000. Business Analytics and Data Science Although Data Science is not traditionally considered a business discipline, the rise of Business Analytics and the popularity of Big Data have somewhat pulled Data Science into the business realm, as it is seen as lucrative and prestigious. Business Analytics (BA) originated from Data Science, but there are three key differences between them: 1. Automation and Skill Requirements: Many Business Analytics tools can automatically perform functions, requiring minimal Data Science expertise from the user. For example, students studying BA are like users who can operate Microsoft Office but don’t need to know how to develop Microsoft Office. Whereas Data Science students are the ones who create Microsoft Office. 2. Problem-Solving Focus: Business Analysts focus on analyzing historical data to solve specific business problems, while Data Scientists generally do not solve specific problems. Data Scientists use advanced statistical methods to explore data, uncover patterns, and use features within the data to guide analysis and predictions. 3. Application Fields: Data Science has a broader range of applications and can be utilized in any field that requires Big Data analysis, such as healthcare, medicine, technology, and beyond. In contrast, Business Analytics is more specifically tailored to addressing business-related issues. Marketing Marketing is one of the most traditional business disciplines, but it continues to evolve with the development of technology and commerce. In English, Marketing and Sales are different concepts representing two branches. · Marketing is the first step of the process, involving market analysis, customer analysis, and the creation and dissemination of advertising and marketing messages. It focuses more on the strategic side, emphasizing the effective output of information to target audiences. · Sales, on the other hand, focuses on direct communication with people, aiming to convert potential leads into actual customers through interpersonal interaction and persuasion. While both are crucial to a business's success, Marketing and Sales work together but have different roles: Marketing sets the stage by creating awareness and interest, and Sales closes the deal by engaging directly with customers. Information Management / Management Information Systems (MIS) Management Information Systems (MIS) is a field that focuses on the study of people, technology, and organizations. In today’s world, anyone involved in business activities will use some form of information system. Examples include eCommerce, online shopping, Customer Relationship Management (CRM) for maintaining customer relations, and online banking. MIS students don’t need to master a lot of programming; being able to use these systems proficiently is usually enough. Courses often include topics like Web Development for Business, Database Applications, and Mobile Application Development. As a result, students with moderate programming and math skills may find this major appealing. Notable universities offering MIS programs: Massachusetts Institute of Technology (MIT) - Sloan School of Management Carnegie Mellon University (CMU) - Heinz College of Information Systems and Public Policy Georgia Institute of Technology - Scheller College of Business University of Texas at Austin - McCombs School of Business Career Prospects Graduates from MIS programs often work in roles such as Business Data Analysts, Management Consultants, Financial Analysts, Operations Analysts, and IT Consultants. For instance, graduates from Carnegie Mellon University’s MIS program have secured positions at prestigious companies like Apple, Credit Suisse, Deutsche Bank, Google, IBM, Microsoft, Procter & Gamble, and Salesforce. This demonstrates strong career opportunities for those in the field. Operations and Supply Chain Management Operations and Supply Chain Management (SCM) involves the logistics management of goods and services, the inventory of in-process goods, and the transportation and storage of finished products from the point of origin to the point of consumption. It is a combination of interconnected networks, channels, and business nodes working together to deliver the products and services needed by the end customer within a supply chain. Top universities offering SCM programs: University of Michigan - Ross School of Business Purdue University - Krannert School of Management Ohio State University - Fisher College of Business Rutgers University - Rutgers Business School Career Prospects Graduates of SCM programs can pursue various roles, such as Buyer, Demand Manager, Materials Analyst, Procurement Manager, and Supply Chain Manager. According to the According to Glassdoor, the estimated total pay for an entry-level supply chain manager is $115,679 per year. Accounting The accounting major is divided into several specializations depending on students’ focus areas, such as Financial Accounting, Auditing, Financial Management, and International Accounting. Students primarily study basic theories and knowledge in accounting, auditing, finance, economics, and business management, while receiving fundamental training in accounting methods and techniques. Career Prospects Graduates with an accounting degree can pursue a wide range of career opportunities in various sectors: Government agencies and nonprofit organizations: Roles include social security accounting, tax accounting, and government accounting. Accounting firms: Opportunities in firms such as the "Big Four" accounting firms, as well as insurance companies. Corporate sector: Roles include CFO (Chief Financial Officer) or positions in corporate finance. Financial advisors and accounting consultants: Self-employed or offering financial and accounting consulting services. Accounting is considered a relatively easy field to find work in, especially in large cities in the U.S. This is particularly true for those pursuing the CPA (Certified Public Accountant) credential, which significantly enhances job prospects. The average starting salary for recent accounting graduates is approximately $64,000 per year. Actuarial Science Actuarial Science combines economics, mathematics (particularly probability theory and statistics), and risk management. Actuaries specialize in analyzing, forecasting, and managing financial risks related to future economic activities. Actuaries typically need to pass various professional certification exams. In a sense, they are risk managers, using data analysis to manage uncertainty and develop strategies to address it. There are not many universities that offer a dedicated undergraduate actuarial science program, and those that do are not typically the highest-ranked institutions. Examples include the University of Illinois Urbana-Champaign (UIUC), the University of Wisconsin-Madison, and the University of Connecticut. However, many top universities offer actuarial science tracks within their mathematics or business schools. For instance, the Wharton School at the University of Pennsylvania and the Stern School of Business at NYU both offer actuarial tracks. At the master's level, there are more programs available. When applying, it is important to check if the school offers the necessary courses for the Society of Actuaries (SOA) exams to become a certified actuary. Career Prospects Actuaries are consistently ranked among the best jobs in the U.S. due to their excellent working conditions, job security, growth opportunities, and especially salary. The profession has been ranked first in CareerCast's list of the best jobs, and is highly regarded by Business Insider, Forbes, CNN, and The Wall Street Journal. Actuaries in North America are classified into two levels of certification: FSA (Fellow of the Society of Actuaries) ASA (Associate of the Society of Actuaries) To become an ASA, candidates must pass six exams. After obtaining the ASA designation, they can take further exams to become an FSA. Actuaries are not limited to the insurance industry; consulting firms, government agencies, commercial banks, investment banks, and large corporations also seek professionals with actuarial backgrounds. The starting salary for an actuary in the U.S. is around $100,000 for recent graduates with little experience. Experienced actuaries can earn between $150,000 to $250,000 per year, and many earn more than that. This makes actuarial science a highly lucrative and stable career path.