“After eight years in software, I started to think about what I really wanted to do. . . . Finance was my biggest hobby.”
The MFin curriculum consists of required fundamental and advanced subjects, restricted electives, an Action Learning course, and general electives. Students have an option of writing a 24-unit thesis or 12-unit independent study, which may replace one or more of the program’s general electives, pending approval by the faculty director.
MIT’s motto, "Mens et Manus" or "Mind and Hand," is very much a working credo. Putting ideas into action is the fundamental principle underlying the Institute’s approach to knowledge creation, education, and research. In the MFin program, "Mens et Manus" manifests itself in a rigorous hands-on curriculum that offers students the chance to build a deep reservoir of finance knowledge and immediately put that knowledge to work in the world. MFin students participate in many Action Learning experiences including, but not limited to, Proseminars and a Finance Research PracticumTM.
Proseminars offer students an outstanding opportunity to work with leading industry practitioners on authentic industry problems. The two Proseminars for MFin students — Proseminar in Corporate Finance/Investment Banking and Proseminar in Capital Markets/Investment Management — help students bridge the gap between theory and practice and introduce them to the broader financial community. The Finance Research PracticumTM similarly offers an opportunity to work on projects proposed by external sponsors, but more intensely. The projects are motivated by real business problems of the sponsor companies and provide an opportunity for students to apply skills they have learned in class in a business setting.
The following courses are required:
Required Fundamental Subjects
15.415 – Finance Theory
Core theory of capital markets and corporate finance. Topics include functions and operations of capital markets, analysis of consumption and investment decisions of investors, valuation theory, financial securities, risk analysis, portfolio theory, asset pricing models, theory of efficient markets, as well as capital budgeting, financing and risk management decisions of firms. The course provides a theoretical foundation of finance and its applications.
15.516 – Corporate Financial Accounting
Preparation and analysis of financial statements. Focuses on measuring and reporting of corporate performance for investment decisions, stock valuation, bankers' loan risk assessment, and evaluations of employee performance, for example. Emphasizes the required interdisciplinary understanding of business. Concepts from finance and economics (e.g., cash flow discounting, risk, valuation, and criteria for choosing among alternative investments) place accounting in the context of the business enterprise.
15.S24 - Math Tools for Finance
Required fundamental subject for all MFin students.
Required Advanced Subjects
15.450 – Analytics of Finance
This course covers the main quantitative methods of finance. It covers three broad sets of topics: financial econometrics, dynamic optimization, and derivative pricing using stochastic calculus. The emphasis is on rigorous and in-depth development of the key techniques and their application to practical problems.
Choose one from the following:
15.451 – Proseminar in Capital Markets and Investment Management
During the Proseminar students will join a team of three to six MIT Sloan participants. The team will tackle a challenging, "live" project and present a report to the project's sponsor and to the Proseminar. Students will also learn from all the other teams' presentations. The goals of the Proseminar include: provide an unstructured research exposure to financial engineering students, push the financial engineering frontier by introducing talented students to unsolved practical problems, develop students’ team and client skills in the financial engineering context, leverage and build the MIT Sloan brand, and provide practitioners with access to top-notch MIT Sloan talent.
15.452 – Proseminar in Corporate Finance and Investment Banking
This seminar exposes students to 10 problems for analysis that are formulated by “clients' who are prominent in the world of financial management. Some are from leading investment banks; others are from notable large public corporations. Students will analyze their client’s actual problems in teams of three to five — problems that are on their desks today or may arrive on their desks in the near future. The goals of the Proseminar include: exposure to a wide variety of current financial problems, opportunities to analyze these problems in far more depth than is possible in a traditional setting, continued work on presentation skills, and interaction with leaders from the world of finance.
15.S26 – Finance Research PracticumTM
The Finance Research PracticumTM is an Action Learning course intended primarily for Master of Finance students but open to all students who have completed 15.450. The entire course is focused on working in a team on a finance project or research question posed by an external sponsor, and reporting back to the class on the findings. Most sponsors are asset managers, banks, and related businesses. Projects are real business problems or research questions which must be addressed to solve a real business problem.
Professional Development Seminar
15.002 – Ethics, Regulatory, and Compliance
The MFin Professional Development Seminars will occur during the second half of the spring semester and will focus on "Ethics and Professionalism" and "Giving Voice to Values." This course is mandatory for all MFin students.
Typically two (but no less than one) per term to meet the required minimum of four courses from:
15.431 – Entrepreneurial Finance
Examines the elements of entrepreneurial finance, focusing on technology-based startup ventures and the early stages of company development. Addresses key questions which challenge all entrepreneurs: how much money can and should be raised; when should it be raised and from whom; what is a reasonable valuation of the company; and how funding, employment contracts and exit decisions should be structured. Aims to prepare students for these decisions, both as entrepreneurs and venture capitalists. In-depth analysis of the structure of the private equity industry.
15.433 – Investments
Financial theory and empirical evidence for making investment decisions. Topics include: portfolio theory; equilibrium models of security prices (including the capital asset pricing model and the arbitrage pricing theory); the empirical behavior of security prices; market efficiency; performance evaluation; and behavioral finance.
15.434 – Advanced Corporate Finance
Advanced topics in corporate finance including complex valuations, static and dynamic capital structure, risk management, and real options. Considers the asymmetric information and incentive problems, security design, restructuring, bankruptcy, and corporate control and governance issues.
15.437 – Options and Futures Markets
Examines the economic role of options and futures markets. Topics: determinants of forward and futures prices, hedging and synthetic asset creation with futures, uses of options in investment strategies, relation between puts and calls, option valuation using binomial trees and Monte Carlo simulation, implied binomial trees, advanced hedging techniques, exotic options, applications to corporate securities and other financial instruments
15.438 – Fixed Income
This advanced course is designed for students seeking to develop a sophisticated understanding of fixed income valuation and hedging methods, and to gain familiarity with the major markets and instruments. Tools for quantifying, hedging, and speculating on risk are emphasized. Topics covered include: duration; convexity; modern approaches to modeling the yield curve; interest rate forwards, futures, swaps and options; credit risk and credit derivatives; mortgages; and securitization. 15.437 Options and Futures is highly recommended but not required. Students without that background may find some of the material requires additional self-study.
15.439 – Investment Management
The course studies financial markets, principally equity markets, from an investment decision-making perspective. The course develops a set of conceptual frameworks and tools, and applies these to particular investments and investment strategies chosen from a broad array of companies, securities, and institutional contexts. Case studies are central to the course, and students are expected to prepare each case before class and participate extensively in class discussions.
15.445 – Mergers and Acquisitions
Probably the most dramatic events in a corporation's history involve the decision to acquire another firm or the decision to oppose being acquired. This is also one of the areas of management most thoroughly documented in the financial press and the academic literature. Subject explores three aspects of the merger and acquisition process: the strategic decision to acquire, the valuation decision of how much to pay, and the financing decision on how to fund the acquisition. Class sessions alternate between discussions of academic readings and applied cases.
15.447 – International Finance – Capital Markets
Analysis of financial markets and instruments in context of globalization. Currency market; exchange rate determination; statistical properties of exchange rates. Currency futures and options. Hedging foreign exchange risk and managing foreign exchange exposure. Euro-currency market and related derivatives market. International bond market, swap market, and equity market. Asset allocation and asset pricing in face of volatile real exchange rates. International portfolio management and performance measurement.
15.460 – Analytics of Finance II
This course covers the practical aspects of the analytics of finance, i.e., how it is used in practice. To that end, all of the topics covered—investment strategies, backtest simulation, data and computational architecture, portfolio construction, trading implementation, and risk management—will be developed in the context of a specific quantitative equity trading strategy. Because concepts are most easily grasped in the particular context in which they are applied, the course is designed to follow the natural sequence of research, development, testing, and implementation for a quantitative investment manager. While the objective of this course is far broader than simply to train students in the art and science of investment management, organizing the material in this manner will provide students with a clearer and more stimulating sense of industry practice. Mathematical and statistical techniques will be covered in some depth—along with their computational implementation in Matlab—however, the emphasis will be on financial applications, not on methodology.
15.464 – Valuation
Valuation is a project-based subject. Students will work in teams to prepare comprehensive and detailed valuations of several major investments. The valuations will require students to acquire a deeper and more detailed understanding of valuation methods and concepts. The professor will offer lectures and teaching notes on some of these topics and work with the project teams. Guest speakers will brief the class on some of the investments.
15.466 – Functional and Strategic Finance
This is a course organized around applying finance science and financial engineering in the design and management of global financial institutions, markets and the financial system. The approach is used to understand the dynamics of institutional change and the design of financial products and services. We also examine the needs of government as user, producer and overseer of the financial system, including the issues surrounding measuring and managing risks in financial crises. In the fast changing environment of the financial system, we try our hand at predicting where things will be in the impending future instead of focusing on where they are now. We will develop the necessary tools of derivative pricing and risk measurement, portfolio analysis and risk accounting, and performance measurement to analyze and implement concepts and new product ideas. We will apply these tools to analyze aspects of the financial crisis of 2007-2009.
The course focuses on a functional perspective in which institutions, markets and financial instruments are all considered tools of the financial engineer for implementing financial functions in the most effective manner at a given time and in a given geopolitical environment. The broad categories of institutions considered are governmental, private-sector, and family-based.
15.467 – Retirement Finance, Lifecycle Investing, and Asset Management
This is a course organized around applying finance science and financial engineering in three related financial activities: retirement finance, lifecycle investing and asset management. We will develop the necessary tools of derivative pricing and risk measurement, portfolio analysis and risk accounting, and performance measurement to analyze and implement concepts and new product ideas. It is expected that the student has familiarity with basic portfolio-selection theory, CAPM, options, futures, swaps and other derivative securities.
15.481 – Financial Market Dynamics and Human Behavior
This course develops a new perspective on the dynamics of financial markets and the roles that human behavior and the business environment play in determining the evolution of behavior and institutions. Although neoclassical economic theories such as expected utility maximization, rational expectations, general equilibrium, and efficient markets have dominated the literature on economic behavior and market structure, recent advances in the cognitive neurosciences, artificial intelligence, computational social science, and evolutionary biology provide a number of new insights into market dynamics. We will draw on these diverse disciplines to develop a more complete understanding of human behavior in the specific context of markets and other economic institutions.
15.491 – Practice of Finance: Advanced Corporate Risk Management
Focuses on how corporations make use of the insights and tools of risk management. Taught from the perspective of potential end-users of derivatives (not the dealer), such as manufacturing corporations, utilities, and software firms. Topics include how companies manage risk, instruments for hedging, liability management and organization, and governance and control.
15.496 – Data Technologies for Quantitative Finance
This course introduces students to financial market data and to data architecture & design, with applications to financial asset pricing, quantitative investment strategies, algorithmic trading, portfolio management, and risk management. Students will use MATLAB, SQL, Bloomberg, Access and other tools to develop data-driven analysis and applications.
15.535 – Business Analysis Using Financial Statements
Presents a framework for business analysis and provides students with tools for financial statement analysis, including strategic, accounting, financial, and prospective analysis. Concepts are then applied to a number of decision making contexts, such as credit analysis, company performance assessment, merger analysis, financial policy decisions, and securities analysis.
MFin students are required to take at least one Restricted Elective each term. Restricted electives must be taken while enrolled in the MFin program. Courses taken while an undergraduate at MIT may not be counted toward the MFin requirements.
"The classroom itself is filled with so much collective brain power . . . it's obvious that I'm caught up in a room full of 124 of the brightest, most curious people from around the world."
“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.”
“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.”
“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.”
“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.”
“At MIT Sloan you have a lot of opportunities to explore entrepreneurship. Especially in a place like Kampala where you have a lot of development, entrepreneurship can be very exciting.”
“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 India Lab] program is one of the reasons I came to Sloan. ... The hands-on learning that MIT offers was a huge differentiator.”
"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."
“The assistant to the CEO was like our host mom while we were there. She arranged our housing for us, she took us out to her friend’s game farm, and we got driven around in 4x4s. She was just wonderful to meet, and we developed a personal as well as professional relationship with her.”
“The conditions in the neighborhoods we were visiting were different than what we realized before getting there. Beyond that, what was surprising was that there weren’t surprises!”
“Our mission, along with the mission of MIT Sloan, is to both develop leaders who make a difference in the world, and also to make a contribution to thinking about the topic of leadership.”
“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.”
“I love being in a place that is such a nexus of people and ideas — people coming to learn something new and to define themselves. Being a part of that process is a real honor and a real gift.”
“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.”
“I actively work to get students to find teammates who think differently than they do. You can’t be successful in management if you only have a single point of view or a particular set of skills.”