Finance Research Practicum™
Practice finance with leading industry professionals
The Finance Research PracticumTM is a graduate-level finance elective course in which students work in teams of three on projects proposed by external sponsor companies. Our 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.
The course is full-time during the month of January and includes some preparation and follow-up before and after the full-time experience. Depending on the sponsoring company and location, students will work on-site and off-site.
Projects address real business problems. Most involve the use of one or more advanced technical skills, including financial econometrics, simulation, derivatives valuation, optimization, and related software and programming languages.
Sample projects include:
1) Model development and evaluation to:
- Recommend whether a pension fund should conduct “tail risk hedging.”
- Help an endowment decide how much to allocate to an inflation swap that takes into account: the preferences of the investor; the risk-and-return characteristics of the swap; and the need to set aside and manage collateral.
- Value and hedge variable annuity guarantees amd Brazilian interest-rate options.
- Develop and back-test an equity trading strategy.
2) Create an agent-based model of the stock market that generates endogenous volatility; use this model to propose recommendations for how traditional portfolio construction methodology should be modified to account for endogenous risk.
3) Analyze the history of commercialization of university-based research in the Boston area and identify common attributes of successful ventures.
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"After we gave our recommendations, the great part was that the very next day the CEO was in the boardroom implementing them with his top vice presidents."
“[The India Lab] program is one of the reasons I came to Sloan. ... The hands-on learning that MIT offers was a huge differentiator.”
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“As the world begins to rebuild its financial infrastructure from the ashes of this economic crisis, I believe MIT is primely positioned to play a leadership role in shaping the future through its research and educational programs.”