A recent study by The Intertek Group tried to assess how the use of financial modeling in asset management had changed over the highly volatile period from 2000 to 2002. Participants in the study included 44 heads of asset management firms in Europe and North America; more than half were from the biggest firms in [...]
Advances in information technology are behind the widespread adoption of modeling in finance. The most important advance has been the enormous increase in the amount of computing power, concurrent with a steep fall in prices. Government agencies have long been using computers for economic modeling, but private firms found it economically justifiable only as of [...]
In its modern sense, financial engineering is the design (or engineering) of contracts and portfolios of contracts that result in predetermined cash flows contingent to different events. Broadly speaking, financial engineering is used to manage investments and risk. The objective is the transfer of risk from one entity to another via appropriate contracts. Though the [...]