Tosh5457 said:
Hello, if I take a master's degree in mathematical finance, what would I do exactly in a bank? And what about in an insurer?
The question you are asking is different from the title. I would strongly recommend people that have an interest in math and physics *NOT* to get an MFE if they want to work in finance. There are a dozen different jobs and a dozen different degrees that will get you into one of the jobs. You can get a finance job with a masters or Ph.D. in pure mathematics, applied mathematics, computer science, statistics, physics, engineering, finance, business administration, actuary science, accounting, etc.
The problem with an MFE is that it's extremely specific. If you get an MBA or a masters in statistics or applied mathematics, and it turns out that you can't find work in an investment bank, then you have a lot of other options. If you have an MFE, then you don't.
The only reason I can think of getting an MFE is if you have a bachelors degree and if the career services in the school is particularly good. Even that is difficult to tell. You have MFE programs with high placement rates, but the term placebo degree comes to mind, because in a lot of situations, the MFE program gives someone a job they could have gotten without the MFE.
Also, MFE programs know this, so if you look closely they've been restructuring themselves so be somewhat broader.
Now as for what people with MFE's do, There are a dozen different jobs but a lot of them boil down to "data shoveling." in an agricultural society, people shoveled dirt. In an industrial society, people shoveled coal. In a post-industrial society, people shovel data. So a lot of what you end up doing is dumping out data from a database, putting it into an Excel spreadsheet, and writing a report from the numbers.
Would I be making mathematical models?
With an MFE. Probably not. You might be reviewing and implementing models. Most of the work of model work and model design is done with people with Ph.D.'s.
Also, let me point out that there isn't a rule that says you can't get into model design if that's what you want to do. It's just that people that end up interested in creating models tend to be people that end up getting Ph.D.'s anyway, and people who do masters degrees rather than get Ph.D.'s because they aren't obsessed with doing research in academia, tend also not to be that interested in doing it in industry.
Part of it is that getting a new model into production is a long and painful process. Sort of like writing a doctoral dissertation.
Don't banks and insurers already have the mathematical models they need?
The world is changing and there is a lot of new stuff, and stuff that we don't understand.
To give you an example of something that I know people are thinking about. The country of North Elbonia has an active market in Yak futures, but unfortunately, the government of North Elbonia will not let foreign banks in. However, in the last six months, the North Elbonian government has given a few licenses for foreign banks to trade yak futures. Now it turns out that the bank already has a yak future business in South Elbonia, and it turns out that you can figure out the price of South Elbonia yak futures by looking at South Elbonian sheep futures. However, North Elbonia does not have a sheep futures market. There is a tiny goat futures market that *maybe* is interesting. It doesn't help that North Elbonia and South Elbonia have different currencies, and the NE dinar is not convertible.
So what do you do? You get a dozen math, econometrics, and physics Ph.D.'s to think about the problem.