Financial Engineering

KIT – University of the State of Baden-Wuerttemberg andNational Research Center of the Helmholtz Association Accredited by

Technology + Management

Executive Master Program

Master Program Keyfacts

>> Program Structure

• Part-time program• Duration of approx. 18 - 20 months• 10 x 2 week modules• 5 Engineering & 5 Management

Modules

• Teaching Language: English

>> Academic Degree

Master of Science (M.Sc.) of the Karlsruhe Institute of Technology (KIT)Credit Points (ECTS): 90

>> Admission Requirements

• Bachelor, Master, Diplom• 1-2 years work experience

(recommended > 3 years)• Corresponding job references• TOEFL score of at least 230 or 95 iBT

>> Tuition Fee

30.000 €; extra: enrollment fee/ semester

>> Next Program Starts

October 2015; October 2016

The HECTOR School of Engineering & Management offers seven Executive Master Programs. The HECTOR School – named after Dr. Hans-Werner Hector, one of the co-founders of the software company SAP – is the Technology Busi-ness School of the Karlsruhe Institute of Technology (KIT).

The Master Programs are more than typical MBA programs, because they combine management with engineering topics. The primary goal is to enable professionals to take a holistic approach when managing highly interdependent processes and to be aware of the latest state of technology in the respected field of expertise.

All programs share five Management Modules, providing the participants with general leadership know how for engineers: knowledge in Finance, Accounting, Marketing, Business Strategy, International Project Management and Intellectual Property Rights. On this basis they can consider commercial implications of business decisions. Workshops and case studies allow ample opportunity to explore the direct application of the know-how, simulating the real business environment.

Essential part of the HECTOR School is the part-time philosophy of its Master Programs. Intermittend periods of lectures are scheduled to allow participants to continue with demanding careers while acquiring new skills & knowledge.

Keyfacts

Assessing and controlling different types of risks are key responsibilities in companies as well as in the financial sector. The quality of risk management processes is a crucial factor in the success or failure of the business. Increasingly complex financial products, various regulations and the enormous importance of information technology have created a great challenge both to financial and non-financial companies. Mastering these challenges requires a thorough understanding of complex financial strategies, financial modeling ability, computational proficiency, and managerial vision.

In response to this demand, our Master Program in Financial Engineering offers a unique combination of familiarity to finance theory, engineering methods, management tools, mathematical and computational techniques. With its long tradition of interdisciplinary programs, the Karlsruhe Institute of Technology (KIT) provides an ideal interdisciplinary environment. Building on the long-established reputation for excellence in business engineering, the two-part program combines an in-

depth knowledge and understanding of fundamental concepts in business, finance, and management, with the latest developments in financial engineering.

With the pace of financial innovation, the need for highly qualified people trained in financial engineering also increases. A demanding career in a financial company such as an investment or commercial bank, or in corporate finance departments of companies would be an ideal place to work, with the abilities attained in the program. The techniques are to the utmost benefit for all candidates, since the material covered is well applicable to corporate finance and corporate risk management.

Meet us, to explore the Financial Engineering track at the Karlsruhe Institute of Technology (KIT). Join us, to acquire the tools that will guide your career path in this exciting area.

Master ProgramFinancial Engineering Master the Financial Challenges:The Engineering Perspective makes the Difference

Program Director Financial Engineering

Chair of Financial Engineering and Derivates, Karlsruhe Institute of Technology (KIT)

Prof. Dr. Marliese Uhrig-Homburg

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Information & Service Management

Nowadays financial as well as other service markets are characterized by a strong interrelation with Information Service Management due to the original set-up of the financial markets. New fi-nancial products depend e.g. on the in-formation technological feasibility.

The overall objective of the module is therefor to provide an introduction into market engineering with an emphasis on the design and the fur-ther development of information markets and services.

The module enables participants to un-derstand and analyze business inno-vation and adaptation processes and thus get an idea of, among other things, innovation diffusion. Innovation driver analyses make participants systemati-cally identify the difference between in-vention and innovation.

Since the structure of information mar-kets is discussed participants are able to develop an understanding for the action of market actors. In addition, consideration of service competition as a business strategy helps participants structure the impacts of service com-petition on the design of businesses, markets, products, processes, and services.

Global Financial Markets

Open up any quality newspaper and you see that Global Financial Markets matter a great deal. Nearly all employers are di-rectly or indirectly affected by changing market prices. On the other hand, em-ployees and households in general hold financial assets to save for retirement. It is therefore a natural question to un-derstand how prices are formed on stock and bond markets and how to build optimal portfolios.

It is the goal of this module to shed light on both questions. This module introduc-es theoretical and empirical insights to help you understand global financial markets. The main focus is on building valuable intuition that will turn out to be very useful for advanced courses and for the professional career.

Participants will understand the main risk/return characteristics of equity and fixed-income markets from a conceptual and empirical point of view. There are scientific reasons for why in the long-run equity beats bond invest-ments, and why it is even more advanta-geous to combine both asset classes into a single portfolio.

E N G I N E E R I N G M O D U L E S

Engineering Modules - Topics

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„Nowadays Banking needs know-ledge on a high sophisticated and very actual level. In my opinion the HECTOR School Master pro-gram Financial Engineering is a very recommendable way if one wants to manage present and future challenges in the overall banking sector sucessfully. The new and state of the art methods in risk management taught in the specific modules are a great help in my everyday practical work.“

Phillip Schultheiß

HECTOR School Intake 2005 & Graduate of the Master Program Financial Engineering

For detailed information on the course contents order our free course guide book.

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Introduction toFinancial Engineering

Financial Engineering is an important component of quantitative finance and risk & asset management.

This module introduces and applies essential financial engineering tools to applications from corporate finance and quantitative asset/risk management. For the corporate finance applications, this module teaches how managers optimize the financing structure and the dividend policy of firms. For the asset/risk management application, the module conveys essential quantitative and computational tools to build superior forecasting models for expected returns and risks of equity and fixed-income investments.

Advanced Financial Engineering

This module provides a unifying ap-proach to the pricing of derivative securities. Moreover, the most impor-tant concepts pertaining to term structure modeling are discussed and participants are introduced to the ef-ficient use and implementation of pricing and risk management meth-ods on derivative and fixed income securities markets.

The participants develop an under-standing of the underlying evaluation theory, realize its limitations, and ap-ply economic and mathematical ap-proaches to analyze and understand financial products. Tools of risk man-agement enable the participants to car-ry out major risk assessments and sensitivity analyses. They learn how to use computer-assisted methods for implementation of evaluation and risk management methods.

During the course on derivatives, they thoroughly cope with financial and de-rivative markets, study static and dy-namic trading strategies and conceive option price theory as a central ap-proach to assessing derivative instru-ments. During the course on fixed in-come, the participants get acquainted

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apply option price theory to assess in-terest derivatives and acquire the ability of managing interest change risks.

Advanced Risk &Asset Management

In this module, risk management is in-troduced by the following process as-pects: risk analysis, risk sensitiven-ess, risk assessment, and risk rating regarding the economic and financi-al risks of an organization.

The graduates will be familiar with ap-proaches to the dynamic optimiza-tion of risk-return profiles that are, for example, of importance to asset management in insurance companies or investment funds. Additionally, they are acquainted with the possibilities of

E N G I N E E R I N G M O D U L E S

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engineering contracts for transfer of selected risks and know that trading with such tools is an important risk management strategy.

During the courses on insurance, risk analysis and asset liability management, and credit risk and operational risk, the participants thoroughly cope with all these aspects of risk management and the limitations of the relevant methods. Hence, they are well prepared for career paths in e.g., banks, capital investment companies, insurance companies, con-sulting firms, and finance departments in large industrial enterprises in Germa-ny and abroad.

Overview Engineering Modules (EM)

EM 1: Information & Service ManagementCourses: Information & Market Engineering, Service Management & Innovation

EM 2: Global Financial MarketsCourses: Global Financial Markets

EM 3: Introduction to Financial EngineeringCourses: Corporate Financial Engineering, Tools for Financial Engineering

EM 4: Advanced Fiancial EngineeringCourses: Derivatives, Fixed Income

EM 5: Advanced Risk & Asset ManagementCourses: Advanced Risk & Asset Management

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Management Modules M A N A G E M E N T M O D U L E SM A N A G E M E N T M O D U L E SManagement Modules M A N A G E M E N T M O D U L E SM A N A G E M E N T M O D U L E S

The aim of the 5 Management Modules (MM) is to provide profound knowledge and understanding of the fundamental concepts which are essential for every successful manager.

InternationalProject Management

International Project Management is a key to the world of business. Participants will get familiar with objectives of project management and scheduling, analysing planned projects and controlling project execution. Particular attention is paid to the construction of project networks and Gantt charts, heuristic solution procedures and rescheduling. Modelling, planning and scheduling, which arise in a great variety of practical situations, are also emphasized.

Finance for Executives

Finance for Executives provides partici-pants with an understanding of the key financial statements and its underlying accounting principles. The course gives an overview of investment rules and financial decisions.

Business Strategy, Marketing & Controlling

This module comprises three important challenges in companies, Business Strategy, Marketing and Controlling. Particular emphasis is placed upon the process of strategic management containing strategic analysis, formulation and evaluation based on competitive advantage, and portfolio strategy. In addition to these concepts approaches of modern marketing that show a strong reference to business strategy are presented.

Stochastic & Games

This module enables participants to gain a better understanding of sto-chastic phenomena and, in particular, to use this knowledge in helping them to make decisions when in a state of uncertainty. Uncertainty can arise from either »nature« or from playing against conscious opponents (»strate-gic uncertainty«).

Law & Contracts

This module comprises both economics and legal sections. In the economics section, a groundwork is laid through introducing decision theory, expected utility, risk and ambiguity, bargaining and basic incentive theory. In addition, fundamental problems regarding world economics are discussed, e.g. stagnation and economic growth, unemployment and international division of labor, and harmonization of the international monetary system. The legal section is divided into lectures about the law of business organizations about international patent, trademark and copyright law.

Management Modules - Topics

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Overview Management Modules (MM)

MM 1: International Project ManagementCourses: Project Management & Scheduling, Multi-Project Management in an Inter-

national Setting, Development Management, Intercultural Management

MM 2: Finance for ExecutivesCourses: Introduction, Financial Accounting, Fundamentals of Finance

MM 3: Business Strategy, Marketing and ControllingCourses: Business Strategy, Introduction to Management Accounting, Marketing

MM 4: Stochastic & GamesCourses: Decisions under Risk & Uncertainty, Optimization under Uncertainty,

Applied Game Theory, Simulation & Case Study

MM 5: Law & ContractsCourses: Decisions, Contracts, Markets & Trade, International Law - The Law of

Business Organizations, International Intellectual Property Law

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Master Program Schedule

The academic calendar for the next program starting on October 2, 2015 consists of 10 intensive modules, each with a duration of 10 days. At the end, the Master Program concludes with a Master Thesis.

The Master Thesis is set up as a project work in the company, starting after the successfull completion of at least nine modules according to the personal study plan.

Participants of the Master Service Management & Engineering also need to take part in a 2-day crash course in probability & statistics (date t.b.a.).

MM Management Modules

EM Engineering Modules

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Imprint

Publisher: Marketing Department HECTOR School of Engineering & Management

Edition: 1/2015Photos: International Department gGmbH, fotolia.com, iStockphoto.com, Karlsruhe Institute of Technology (KIT)Visit us on Facebook!

Master Program Financial Engineering

PEOPLE | POTENTIAL | PERSPECTIVE

Contact

International Department des Karlsruher Instituts für Technologie (KIT) gGmbH

Schlossplatz 19

76131 Karlsruhe/Germany

Phone +49 (0)721-608 47880

Fax +49 (0)721-608 47882

E-mail info@hectorschool.com

Web www.hectorschool.com