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Finance Research Practicum & Proseminars
The Finance Research PracticumTM and Proseminars are graduate-level finance elective courses in which students work in teams on projects proposed by external sponsors. The goal is to provide students with an outstanding opportunity to work with leading industry practitioners on important business problems, while helping them bridge the gap between theory and practice, and introducing them to the broader financial community.
Finance Research PracticumTM Process
The course is full-time during the month of January and includes some preparation and follow-up before and after the fulltime experience. The projects address real business problems and involve the use of one or more advanced technical skills, including financial econometrics, simulation, derivatives valuation, optimization, and related software and programming languages.
Finance Research PracticumTM Opportunities
Example projects have included: developing a model for valuating and hedging variable annuity guarantees; building a prototype for a model for valuing and hedging Brazil interest-rate options; creating an agent-based model of the stock market that generates endogenous volatility; and analyzing the history of commercialization of university-based research in the Boston area and identify common attributes of successful ventures.
Proseminars offer students an outstanding opportunity to work with leading industry practitioners on authentic industry problems, help students bridge the gap between theory and practice, and introduce them to the broader financial community. Students work in teams to tackle problems posed by company sponsors and present findings to leading experts in the finance industry and to classmates.
- Provide investment banking advice to a private equity-controlled chemical company, including valuation, analysis, and exit strategies.
- Analyze the cost of trading foreign exchange for a major New York-based asset management firm.
- Construct a rainy day fund that will perform well when equity prices are falling, volatility in increasing, and credit spreads are widening for a significant Boston-based hedge fund.
- Give recommendations on raising capital for a rapidly growing private company.
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“Because of the diversity of our backgrounds, when we hit the ground in Tanzania it almost was a natural play where different people assume different roles.”
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“I can honestly say that when I was planning on coming to business school I never thought that witnessing the birth of a child would be included in the education. It was definitely an experience.”
“These companies are really excited to work with MIT students.They reach out to the community to set up these projects and are great to work with. They give us access to all their resources and are very open to us.”
“One of the reasons I came to Sloan was because I wanted to be at a top MBA institution worldwide. But I also wanted access to working with the latest innovations and the highest technology that was coming out of the MIT labs.”
“The concept behind enterprise architecture is that you have all these machines, you have all these business processes, you have all these people doing things, how do you make sure they all come together and achieve business objectives that make you more competitive.”
“You could talk about watershed management and conservation of energy all you want. But until you put numbers to it and financial analysis to it, you’re not going to get much done. I came to business school to speak that language, speak with people in terms of numbers, financial numbers so that I can get projects done.”
“I knew about American business, but not enough about what’s really become a global economy. … You can read about it all you want, but there’s no substitute for being there and seeing the context and seeing how completely different these [other countries] are.”
“It was really rewarding that they wanted to know what we thought. We left there being fairly certain that they will do some of the things that we suggested.”
“We are very much an action-learning environment. The way to learn leadership is not only through reading cases, not only through learning theory — in fact we don’t want people to regurgitate the theory. We want people to take theory and to live it, use it.”
“We’re very interdisciplinary. Among the faculty in the group are an economist, a political scientist, a sociologist, and an industrial relations specialist. We’ve always made a big effort to be open to a variety of perspectives, but also to go beyond being open to them, to want to bring them in, because it makes for a richer environment.”
"The relationships that we forged helped us to turn out a better project. We were able to test our hypotheses with the people that we spoke with every single day. And really, I think the friendships that you develop really propel the work that you’re doing."
“In one class I teach, I introduce a new economic concept each class in the context of a different country. In almost every case, we have one or more students in class who come from or have worked in these countries.”