Finance as a major field in PhD economics

[dhtuan2000]

Hi
I already posted this in the PhD economics forum, but I want to hear from Finance people too:

I got accepted to a phD program in economics, which is ranked quite high in Finance (financial economics)
My parents also teach Finance in college, and they got me interested in Finance
However, I have no background in Finance. I am a math, econ double major but have taken no Finance courses. Is it still possible for me to pick Finance as one of my fields, and be good at it too?

[Teazer]

The math & econ background is more helpful for phd finance than a straight business background but you might need to build up some intuition of how the markets work as well as work on the terminology.

Given your parents are in the Finance field, read a few of their more general books to get an idea of the subject. For instance, "A random walk down wall street" gives an easy read on what's going on. Then get used to flipping through the Wall Street Journal or something similar each day to see what sort of interesting questions there are & how theory and reality work out.

[reactor]

if you'd like this thread to be moved to the "PhD in Economics" subforum where it might get more attention/responses, just let me know (PM or post it here).

[shootermcgavin7]

Hi
Is it still possible for me to pick Finance as one of my fields, and be good at it too?

You can pick up the appropriate Finance background in a single MBA textbook. Of course, some business experience will help shed some perspective on your work...but math will always be more helpful.

A strong finance applicant is similar to a strong econ applicant; the first year Core is the same.

That said, a Finance PhD is an odd sort of discipline that requires skills in math, economics, finance, accounting..and generally some sort of business intuition.

[apropos]

Like I said on Econ PhD forum, if you want to study asset markets, the lack of preparation won't matter much.. An asset markets course requires a good understanding of probability theory and microeconomics, and you won't be taking it until the second year anyways. If you want to get some additional background in financial markets, look for a book "Investment Science" on amazon. This is what IEOR department is using to teach a master's level financial engineering course at my school. If you want something less technical (e.g. MBA level) see Bodie/Kane/Zvi's "Investments" text.

However, the prerequisites might be different if you're planning on taking a corporate finance course.

[dwigt]

Math & Econ is a way better background than a finance undergrad. Finance undergrad is even more useless than econ undergrad.

I think if you want to get a job in a finance department, it would be advisable to get some faculty in the business school on your committee.

BTW, you should say "asset pricing" not "asset markets" to fit in

[dhtuan2000]

Thanks for all of your comments. They are very helpful

[nauru]

I think the usefulness/uselessness of an undergraduate degree in econ depends largely on the specific program. Some (ie Warwick) require quite a bit of math, stats and econometrics, while others (ie McGill) will give you an econ degree even if you never took a course in calculus.

[apropos]

As far as useful majors go, UC Irvine is now offering a major in quantitative economics. This major requires calculus and matrix-based courses in probability, statistics, and econometrics (3 quarter sequence), intermediate economic theory courses that use calculus (based on Nicholson's book and something else), additional advanced courses in economics of information, financial engineering, and other topics, and it has enough room to fit courses like advanced linear algebra and real analysis. Sounds like a pretty damn good prep for graduate school.

However, arguably, one can take all of such courses at many other UC campuses too or say at Stanford or Rice University as a part of normal economics major. It's just, no one is gonna tell you that you need to take those courses until it's the last semester in the program and you suddenly decide "oh no! I wanna go a PhD in Economics or Finance and I have one semester left! What should I do???"

[Weary]

Shouldn`t asset pricing be more demanding in terms of prerequisites? If you won`t be taking probability until the 2nd year, how deep into stochastic processes and financial econometrics you`ll be able to dig afterwards?