“Whenever I ran into a problem or had an issue, I just contacted my CDO counselor, and he was always there.”
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:
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 - Fundamentals of Financial Mathematics
Provides an overview of essential math tools utilized throughout the MFin Program.
Required Advanced Subject
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.
Required Action Learning
Choose one from the following:
15.451 – Proseminar in Capital Markets/ Investment Management
The proseminar provides students a unique opportunity to tackle original research problems in financial engineering that have been posed by leading experts from the financial community. Students are assigned to teams and each team is assigned one such problem. The team's solution is then presented at a seminar which is open to the entire MIT community.
15.452 – Proseminar in Corporate Finance/ Investment Banking
The proseminar has two principal goals: to bridge the gap between finance theory and finance practice; and to introduce students to the broader financial community. Both are accomplished by student participation in a series of proseminars with industry guest speakers. Each guest, in collaboration with finance faculty, provides a problem and materials to a team of students. Each team then prepares a report and presents their analysis to the guest speaker and other students for evaluation and feedback.
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. Taking place over IAP and Spring H-1, 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 one’s 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.
Required Professional Development Course
15.S23 – Core Values, Regulation, and Compliance for Finance Professionals
This course is mandatory for all MFin students and will take place during Spring H-2.
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.
15.466 – 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.
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“[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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"If we do our job right here, we’ll be dealing with new problems, not old ones. We don’t want just to train people to understand what went wrong in 2008, but how will financial organizations deal in the future?"