Partial DiffEq or Prob and Stats II

[eg37se]

I am looking to go get a PHD in Finance. Which one would look better/be more useful. They are offered at the same time so I cannot take both.

MATH 372 Partial Differential Equations
An introduction to those equations which play a central role in many problems in applied math and in physical and engineering sciences. Topics include first-order equations, the most useful second-order equations (e.g.:Laplace's wave and diffusion), and some methods for solving such equations, including numerical techniques. Modeling for the motion of a vibrating string and conduction of heat in a solid body are emphasized. Prerequisites: MATH 326

OR

MATH 361 Probability and Statistics II
A continuation of MATH 360 including additional topics in probability, sampling distributions, point and interval estimation, and tests of hypothesis. Topics also include: regression and correlation, the analysis of variance, and nonparametric statistics.


THANKS.

[phdhope]

Hmm...I don't really particularly like either. The first class seems to be focused on using math in engineering problems. The second would be useful for experimental research which isn't exactly the main line of research in finance. That being said I feel better about the second class.

[zshfryoh1]

It depends on what topics in finance you are interested in. If your interestes are in asset pricing theory, financial engineering or corp finance theory take PDE's. If your interests are in empirical corp finance, empirical asset pricing, experimental/behavioral finance, financial econometrics or market microstructure, take Prob and Stats. If your interests are a mix, if you are very comfortable with advanced math take PDEs, and if not take Prob and Stats.

Nearly all UG level PDE's courses are directed toward physics or applied math majors, but you usually don't actually need to know any physics for the course and the techniques covered are useful. The wave and diffusion equations lay the groundwork for the PDEs used in finance.

[eg37se]

I was asking more from an admissions standpoint. Sorry for the confusion.

[zshfryoh1]

Originally Posted by eg37se

I was asking more from an admissions standpoint. Sorry for the confusion.

From an admissions standpoint, PDEs will look much more impressive. Of course, it is generally expected that you are coming in to a finance PhD program with a stats/econometrics course that includes regression and hypothesis testing, but as long as you are getting this from some other course like an econometrics or stats theory course, then PDEs definitely looks better in an application than an extra prob and stats course.

Edit: I looked at your school's course bulletin and it seems from the descriptions there that the econometrics course you have mentioned taking in previous threads (Econ 301 at your school I believe) does cover regression, correlation and hypothesis testing. So I think you should take PDEs, assuming you think you can handle it together with whatever other math courses you may be taking, as it is usually one of the hardest UG level math courses at most schools.

[eg37se]

Wow, thank you zshfryoh1. Going above and beyond. You have my thanks.

[shootermcgavin7]

Unless you are applying to an asset-pricing-heavy school (or your interest is theoretical asset pricing), I would opt for the second course.

PDE is not particularly useful for Corp Finance theory (which previous posters have claimed), most modern Corp Finance theory is game theory..........which tends to have a very probabilistic flair.

[zshfryoh1]

Originally Posted by shootermcgavin7

Unless you are applying to an asset-pricing-heavy school (or your interest is theoretical asset pricing), I would opt for the second course.

PDE is not particularly useful for Corp Finance theory (which previous posters have claimed), most modern Corp Finance theory is game theory..........which tends to have a very probabilistic flair.

It is useful in Corp Finance theory in that the stats and prob course does not look particularly rigorous or advanced, so any more rigorous math is better if you are interested in theory. Anyway, the OP corrected that it was regarding which looks better for admissions, which is definitely PDEs

[shootermcgavin7]

Originally Posted by zshfryoh1

Anyway, the OP corrected that it was regarding which looks better for admissions, which is definitely PDEs

Conditional on getting the same grade in both courses.

[Mr. Crocodile]

Both are important. Of course, PDEs are frequently used in theoretical asset pricing while statistics underpins all empirical work. So the question is, what do you want to do? This said, PDEs is more difficult to learn by yourself, so maybe go for that.