Letter from the Director

Thank you for your interest in the Mathematical Finance Program at Boston University. We invite you to browse our website to acquaint yourself with our Program and its mission.

Since its inception in 1999, the Program has helped many young people to launch successful careers in the financial services industry. Nothing summarizes better our accomplishments than the list of companies and institutions that have employed our graduates.

Every now and then I am asked to explain what exactly is Mathematical Finance. My brief answer is that Mathematical Finance is simply Finance which is mathematical. Although stories about "rocket scientists" working on Wall. St. abound, many of my colleagues are still perplexed when they hear that a social science such as Finance can actually be mathematical.

But in fact, Theoretical Finance and Economics are the only disciplines outside Mathematics in which all fundamental results are formulated in the form of Theorems and are substantiated by way of formal proofs, which, by the way, are no less rigorous than the proofs found in the most advanced texts in Mathematics. This should not be surprising because Modern Finance employs mathematical theories and computational methods that are as sophisticated as the theoretical tools and methods used in, for example, Quantum Physics or Engineering. Nevertheless, knowledge of all related mathematical theories and computational methods alone does not constitute knowledge of Mathematical Finance -- just as even the deepest knowledge of Functional Analysis and Algebra does not constitute knowledge of Quantum Physics. Unlike Physics, however, there are vast areas in Finance and Economics that do not involve tools like Brownian motion and stochastic calculus and those areas have been -- and most likely will continue to be -- of paramount importance to society. For this reason, Finance and Economics, as well as the discipline known as Financial Economics, are not expected to merge with Mathematical Finance any time soon, even as the borderline between these three areas of intellectual inquiry becomes increasingly blurred.

The main reason that graduate programs in Mathematical Finance did not develop as some sort of "sub-programs" within graduate programs in Economics or Finance is that Mathematical Finance appeals to students with rather distinct background and interests. Furthermore, the career path of a typical graduate from a program in Mathematical Finance is considerably different from the career path of a graduate from, say, a typical MBA Program. In general, students who enter a graduate program in Mathematical Finance must be able to carry out sophisticated mathematical reasonings to the same extent to which students who enter a graduate program in Mathematics are expected to. It would not be an exaggeration to say that for those who are planning to enter the field of Mathematical Finance, there is no such thing as knowing too much mathematics. The Program's prerequisites represent only the very minimal academic background that one would need in order to get started (with the stipulation that one would be able to quickly fill in certain gaps on his/her own). For undergraduate students who are planning to apply to a graduate program in Mathematical Finance that is comparable to the one offered at BU, I would recommend taking honors classes of the highest possible level in Calculus, Linear Algebra, Differential Equations, Real and Complex Analysis, Probability, Numerical Methods and Topology, in addition to a few introductory courses in Finance and Economics.

The MA degree program in Mathematical Finance offered at Boston University is both challenging and intense -- in fact, it is somewhat more challenging than the average MA or MS program in the sciences or engineering simply because it involves not one, but two distinct fields of study (with the added challenge of understanding the interplay between them). With the help of my colleagues from the Dept. of Finance and Economics of the School of Management and the Departments of Economics and Mathematics and Statistics of the College of Arts and Sciences, we have designed a course curriculum that is not only relevant and current, but is also coherent, consistent and efficient -- all courses in the program were developed specifically for the purpose of graduate education in Mathematical Finance. Most of the courses in the program are very theoretical and very practical (down to the actual computer code) at the same time. All faculty and staff involved with the program have always been and continue to be firmly committed to delivering a graduate program of the highest possible quality. We recognize that it is the hard work and the commitment of our students, faculty and staff that made it possible for our graduates to successfully compete in the job-market with graduates of other similar programs.

We do not offer financial aid to our students because we know from our past experience that after graduating from the program, students who are truly committed to the field of Mathematical Finance can get well-paying jobs which more than compensate for the investment in one's education. It is important to realize, however, that even the most advanced graduate degree in the area of Mathematical Finance is not a guarantee of a successful career. This is because positions in the financial services industry are highly prized and eagerly sought after. It is a very competitive and demanding field in which building a successful career depends not only on one's education, but also on one's personal qualities and attitude.

I have been fascinated with the beauty of mathematics since childhood. I began competing in mathematics contests at the age of 12 and eventually represented my native country at the International Mathematical Olympiad. After graduating from college, I helped other young people to train for this international competition. My only regret is that at the beginning of my career as a mathematician I did not notice that very beautiful mathematics also can be found in Finance and Economics. I invite students with a strong affinity for mathematical reasoning to take a glimpse into the field of Mathematical Finance to see if this field appeals to them intellectually.

Andrew Lyasoff

Program Director