Finance Course Subjects

A career in the finance industry can be a very rewarding one indeed. Successful financial professionals are rewarded with a good salary, bonuses, commissions, and other perks. They are also rewarded with respect and esteem; they are held in high regard by fellow employees, managers, and individual and business clients alike, and they are afforded opportunities for professional development and further career advancement. But, their success and reward does not come quickly or easily; these individuals must study hard and work even harder. They must prepare for their careers by honing the right combination of skills and education necessary to give them a professional edge.

Whether the financial professional works in the banking, investing, planning, or accounting field, he or she is required to make decisions that benefit the client by raising funds while simultaneously controlling costs.

Financial managers must first understand their clients’ goals and then make strategic, quantitative decisions involving the appropriate resources for reaching those goals. Some of the specific responsibilities financial professionals must perform include: allocating funds in both the public and private sectors, developing cash management strategies, tracking investment activities, using a computer to access financial information, collaborating with others in varying financial departments to support a client’s objective of growth and financial strength, and building new relationships while maintaining those already in existence.

A formal finance course at a business school or through another accredited finance program provides an aspiring financial professional with the basic prerequisites needed to get started in a career in finance. Many of the courses a student takes at the undergraduate level are fundamental finance standards: mathematics courses such as accounting and statistics, computer science, and both micro- and macroeconomics.

There are, however, a number of other courses that undergraduate finance students should consider taking—courses that will round out their skills and better prepare them for dealing with individuals and organizations as they enter the world of finance. In addition to having a solid background in finance, employers and executives alike are increasingly looking for prospective employees to have problem-solving and critical-thinking capabilities, strategic decision-making skills, and experience in managing people and teams. Students who take courses in psychology gain an understanding of human behavior in the context of a financial environment. Communications skills are also imperative as finance professionals must deal directly with clients, understanding their financial situation and needs and then communicating appropriate recommendations back to them.

The finance course subjects at the bachelor’s degree level provide a student with the minimum level of education they need to start on the path to a successful career in finance. From there, those who wish to gain additional expertise and expand their career opportunities pursue master’s degrees in finance, accounting or business administration. Finance courses at the master’s level teach students how to become decision makers for stockholders and financial organizations. At the graduate level, students learn about the types of financial markets and the products that exist within those markets. They learn how to evaluate and price different types of securities. They are taught how to analyze the behaviors of investors who make the business decisions and also how fiscal policies affect the economy. Students taking graduate courses in finance spend more time putting their mathematical skills to use by learning applied quantitative methods. They study tax and finance in depth, as well as international finance.

Finance professionals make huge investments in their education and training in order to be successful in their careers. By taking a variety of courses beyond the fundamental finance courses, they increase their chances of success in their chosen fields.

Mathematics

Finance Course Subjects

Finance majors have specific requirements for mathematics as part of their finance course curriculums. At the undergraduate level, students learn a broad range of mathematical techniques and strategies for problem solving. They are introduced to the many components of financial analysis. At this level of their education, students begin to learn how mathematics can be applied to financial management, business analysis, market transactions, insurance, investments, and pensions. By the time a student obtains a bachelor’s degree in finance, he or she should be able to understand financial models and the relationships between some basic financial equations and financial projections and accounting statements. Students who decide to pursue their master’s degrees are required to take more complex mathematics courses.

Some of the specific mathematics courses a finance student should take at the undergraduate level include algebra, calculus, and statistics. Algebra teaches functions and equations that apply to finance and accounting and provides a foundation for more advanced course work needed to understand business operations such as payroll and taxes, depreciation, and insurance. The learning from linear algebra can be applied to portfolio optimization, whereby a financial professional can determine the most effective weightings of stocks in a portfolio. Simple algebra is applicable for bond pricing.

Statistics is the study of numerical data that is obtained through research. Specifically, statistics studies the collection, organization, and interpretation of that research data. The topics statistics courses most commonly cover include the measures of central tendency of mean, median, and mode; the variance and standard deviation measures of variability; methods for statistical sampling; probability; testing hypotheses; and analysis of variance. Statistics helps finance professionals to analyze and measure the levels of risk involved in investment deals. By analyzing survey data and past performance, finance professionals can predict market behavior and help businesses make certain decisions.

Calculus is the study of cost and rates of change, both of which apply to the maximization of profit while minimizing expenditure. Some of the common topics covered in undergraduate calculus courses include differentiation and integration along with their respective applications, transcendental functions including exponential and logarithmic, parametric equations, derivatives and their applications, infinite sequences and series, and various theorems. Finance majors typically need to complete Calculus I, while those students who intend on pursuing postgraduate degrees in finance should take all three levels of calculus at the undergraduate level.

Asset pricing is an example of a graduate-level course involving mathematics. The models used for asset pricing include math-based tools and methodologies that support the evaluation and pricing of financial assets. The student must have completed a course in advanced calculus as one of the prerequisites to asset pricing. Another graduate-level mathematics course requiring a strong background in mathematics is that of applied quantitative methods. In this course, students study complex methods using statistics in order to learn how to price the risks and securities that occur in financial markets. These skills can later be put to use performing investment risk profiling, for example.

In essence, finance students should take mathematics courses so that they can solve equations in the ever-changing, complicated financial markets. And, an understanding of statistics helps the finance professional to make decisions or recommend solutions based upon the probability of various results that could possibly occur. Individuals are required to take additional mathematics courses in accordance with educational program requirements.

Accounting

Accounting is defined as the systematic recording, reporting, and analysis of the financial dealings and transactions of a business or company. Those who perform accounting functions are involved in preparing statements and declarations regarding the assets and liabilities of a business, as well as producing information on the outcomes of business operations. Simply put, a company’s accountants and auditors keep records of a company’s money. Accounting is extremely important in the world of finance.

The statements and declarations accountants produce contain information such as a company’s balance sheets, profit and loss accounts, and information regarding how a business receives and uses funds. A company’s financial directors analyze the data, monitor the company’s budgets and performance, and consider the future direction of the company, including ensuring it complies with legal and financial responsibilities, such as paying taxes, for example.

A finance course in accounting can lead to various degrees and designations, such as a bachelor’s of science in accounting, a bachelor’s of science in business—accounting, a master’s in business administration (MBA)—accounting, and various certifications, not the least of which is that of Certified Public Accountant (CPA). Many accountants specialize in a particular area of accounting. Some work as public accountants performing accounting, auditing, tax, and consulting functions. Others work as management accountants, maintaining all the financial records of the companies that employ them. Some accountants specialize in auditing, where they check to confirm the accounting records of a company are correct and that there is no waste or abuse of the company’s finances. And others are government accountants or auditors, working with the government’s accounting records, as well as with those of the people doing business with the government.

At the undergraduate level of study, finance or accounting students take various levels of accounting courses, including principles of accounting, income tax courses, governmental accounting, international accounting, and auditing. Upon successful completion of the course work, the student is prepared to enter the job market as an accountant. Others continue their education, working toward their master’s degrees. Examples of accounting courses at the graduate level include:

  1. Managerial accounting, which teaches students how to analyze and interpret data and use accounting information for managerial planning and decision making.
  2. Federal taxation theory and research, which teaches the basics of tax theory and tax planning.
  3. Advanced auditing, which teaches audit standards for public entities and computer controls and use.
  4. Commercial law, which covers law topics that pertain to accountants and auditors, as well as federal regulation and state statutes.

Accountants can take continuing education courses and additional training to receive a variety of certifications and professional designations. The path to receiving a CPA designation is neither easy nor short as there are educational and experience requirements that must be met. The CPA examination is very difficult, consisting of four parts and a separate ethics examination. CPA licensure requirements vary by state. CPA is, however, the most popular professional designation for accountants. Accountants can also become Certified Management Accountants (CMAs), which also requires a rigorous, four-part examination in which the accountant must demonstrate mastery of required skills in the areas of business analysis, accounting and reporting, and others. Another professional accounting designation is that of Certified Internal Auditor. Those who earn this certification have the education and tools that demonstrate their competencies and levels of professionalism, making them employable in virtually any business environment.

By selecting the right finance course of study, a qualified accountant will be well-prepared to perform a wide variety of financial duties for individual clients and for corporations and government agencies.

Economics

Economics is another very important topic of study for finance students. Economics is important in that it provides the models and resources economists and financial experts need in order to systematically analyze the economic forces and patterns that affect us all in our daily lives. At the undergraduate level of a finance course, students take classes in microeconomics, macroeconomics, and international economics.

A course in microeconomics teaches students about economic decisions that are made by individuals and organizations at a micro, or low, level, analyzing these decisions by looking at the factors that affect them. Microeconomics also looks at how these economic behaviors and decisions affect other people and organizations. Decisions made at a microeconomic level involve cost and benefit considerations. Microeconomics deals with allocation of resources and the pricing of those resources so that consumers get the most goods for their money, while companies also earn a profit.

Macroeconomics, on the other hand, examines the economy and economic performance on a large, wholesale scale, aggregating the items of national income, investments, and consumption. Understanding how an individual behaves at the micro level, when there is a change in the level of interest, for example, helps economists to understand the effects of interest rate changes on a large, national scale. Macroeconomics examines such topics as economic growth, changes in employment or unemployment, inflation, government economic policies, and international trade performance.

International economics studies international finance, markets, trade, and investing; it builds on the fundamentals of micro- and macroeconomics. International economics covers topics such as exchange rates of the dollar and how money flows among countries, free trade, immigration, and international trade regulations. Specific topics covered in courses on international economics can include outsourcing work to other countries and how trade and labor standards affect the lives of common citizens.

Economics is an important subject of study for students enrolled in a finance course. Those interested in investing learn about interest and exchange rates, as well as about economic indicators and equity markets. Another important lesson to be learned in economics is to understand and recognize the secondary effects of political or governmental changes or decisions and the impact those changes ultimately have on the economy. Economics also teaches students how the world operates and how a single decision can affect an organization, an industry, or an entire nation.

Master’s degree programs in economics prepare students who wish to work in business or financial institutions or government agencies. At the graduate level, students learn to analyze external economic situations that affect a business and the appropriate corporate actions to take based upon these economic forces. Students work with economic theory, applying their quantitative skills. Examples of graduate courses a finance student can take include economic analysis, data mining techniques, public finance, law and economics, and emerging markets. Students in master’s degree programs usually work in internships and are required to write theses as a graduation requirement.

In general, by studying economics, the finance student will understand theoretical finance, have the tools to think through topics more analytically, and can make appropriate assumptions based upon their realizations.

Psychology

While it may not seem obvious at first, the importance of including psychology in a finance course curriculum cannot be underscored enough. We generally think of psychology as the science that assesses and treats mental health problems. The principles of psychology can, however, be extended and applied to understanding issues and resolving problems that reach well beyond the mental state of a single individual. Once you understand that psychology is the science that deals with mental processes, functions, and behavior, as well as dealing with the emotional and behavioral characteristics of individuals, groups, or even activities, the value to a financial professional of understanding psychology becomes clearer. Psychology also refers to actions or positions taken in an understated manner with the intent of manipulating or influencing others.

Unlike the financial quantitative skills involving exacting computational and numeric methods, psychology provides qualitative skills that help professionals recognize and understand behaviors and thought processes that affect developments in national and global financial markets. At an introductory level, finance students should take a course in behavioral psychology. The concept that all behaviors are learned through conditioning forms the foundation of behavioral psychology. As individuals and businesses interact with their respective environments, behavior conditioning occurs. Individuals’ behavioral tendencies affect routine financial decisions. Some of these behaviors can be detrimental. The finance professional needs to understand this and how to help individuals make decisions that improve their wealth, not harm it.

Another psychology course in particular, critical thinking, helps finance students learn how to examine, assess, and evaluate situations, arguments, and assumptions from every perspective before reaching a conclusion, making a decision, or recommending a solution. In critical thinking, the individual should use a reasonable and reflective approach in the thought process, managing ambiguity for clarity and seeing potential and opportunity where others see hurdles. A finance professional with well-developed critical-thinking skills raises vital questions and issues and collects and evaluates all relevant information in order to reach solutions and conclusions that are thoroughly reasoned. Open-mindedness is necessary, as is an ability to communicate effectively with others when searching for solutions to complex problems.

Another psychology course, behavioral finance, examines the role thoughts and feelings play in how individuals, organizations, and companies make decisions about money, such as investing and borrowing. Financial professionals need to understand not only the social and emotional influences that drive people and institutions to make the economic decisions they do but also the effects these decisions have on market prices, market returns, and resource allocation. Behavioral finance examines market inefficiencies. When individuals or companies either overreact or underreact to a situation, upward or downward market trends occur. For example, market inefficiencies occur when investors do not pay sufficient attention to, or are overconfident about, a given situation. By taking a course in behavioral finance, the student learns how to improve his or her decision-making capabilities and help others to do the same.

Finance professionals need to understand both the logical, mathematical side applicable to virtually any career in finance as well as the human psychological side that plays a big role in determining financial outcomes.

Technical Writing

Technical writing should be included in every finance course curriculum. Finance students need to learn the skill of technical writing in order to be able to provide relevant business, technical, or educational information about their jobs, whether they are in accounting, auditing, investing, or any other finance position—information that must be clear, concise, and beneficial to the person reading it. While there is more logic than creativity involved in technical writing, an individual who performs technical writing still needs to write in such a manner that the reader, who may or may not be a professional, is able to comprehend and assimilate the information provided.

There are several key guidelines every technical writer should master and follow. First and foremost, the technical writer should ensure spelling and grammar are correct in the written document. Minimize the use of abbreviations, jargon, and acronyms; if you must use them, verify they have first been clearly explained and defined. When in doubt, use a dictionary, grammar guide, or style book rather than relying on computer spell and grammar check programs to catch errors. Another recommendation is to use an appropriate writing style for your technical document, for example AP or Chicago style. Refer to style guides for the rules for each style of writing, and use the same style consistently throughout a document or series of documents. The next general rule of technical writing is to know your audience, that is, understand who will be reading your document. Will it be an executive from your company, an individual consumer, or a computer programmer? The language you use can and should vary depending on who will be reading it. A course in technical writing goes into greater detail on these and other writing guidelines.

There is a need for technical writers in many aspects of the finance industry. One example is documenting the training manuals and user documentation for relating complex business processes for financial companies that are implementing comprehensive enterprise systems for managing every significant process of the business. The intent with this type of writing is to bring companies into compliance with the Sarbanes Oxley Act of 2002, which requires companies to detail their financial processes and to be prepared for audits.

Mortgage lending companies also require technical writers. Mortgage loan officers and others must be fully trained on company policy and loan procedures. Training is provided in the form of training programs, method and procedure documentation, and user manuals for job-specific software applications.

Companies that handle mergers and acquisitions require technical writers. When a merger or acquisition occurs, two companies combine or one company acquires another, with the result being that one company takes operational control of the other. Technical writers are needed to develop documentation for software and systems and also marketing communication materials. Business writers develop documents for company valuation and legal contracts. Each of these different types of documents requires different financial expertise.

Technical writing positions can require some very specific skills, not the least of which is experience with a financial company. Prospective employers will probably require previous experience in the development of a specific type of documents, for example, audit and compliance documents; experience modeling and mapping business process flows; and experience in direct technology or systems or an ability to understand application developers and system administrators.

Whether the finance company offers banking, loan, investment, or insurance services, it has a need for technical and business writers. Finance students should ensure their own courses of study include at least one technical writing course.

Communications

In addition to advanced calculus, economic analysis, and principles of accounting, students who are enrolled in finance course curriculums should also ensure they include one or more classes in communications as a prerequisite to their graduation. Whether an individual works for a huge corporation or is in business for him- or herself, the ability to communicate, and communicate well, is a primary factor that contributes to that person’s success. Employers no longer look only at a prospective employee’s business school curriculum and grade point average; executives at financial companies now expect newly hired employees to enter the workforce with solid communication skills as well. How else can an individual interact with colleagues, coworkers, and customers? Effective communication skills are important on many different levels.

In a world where e-mail and instant messaging reign as preferred modes of communication for many due to the speed with which their messages are transmitted, these electronic “conversations” are not nearly as effective as face-to-face, in-person communication between and among human beings. Financial planners, investment bankers, accountants, and auditors, for example, must all communicate directly with clients. These clients can be internal coworkers and colleagues in a team or group setting or external customers with whom the professional meets in one-on-one sessions to provide financial advice. Or, the client could be your boss or management team who expects monthly results and reports from you. If you do not listen to what the client says, or if you are unable to clearly and concisely respond or present facts, there will be a breakdown in communication. Such a breakdown can result in misunderstandings, missed business opportunities, errors, omissions, or worse, lost business for you or your company.

Those who work as part of a team can benefit from a course that teaches collaborative communication skills. Such a course will teach you how to establish collaborative relationships with coworkers and achieve results from your communications with them. A basic communications course also teaches students how to actively listen to others and how to avoid misunderstandings.

Business managers who want to improve team performance can learn essential skills in a facilitation class that teaches them how to achieve results through proper planning and team collaboration. A facilitation skills class can show managers and supervisors how to increase productivity and draw high-quality information from workers.

Technical support, front-line staff, independent contractors, and just about everyone else within an organization or company will benefit from taking classes on how to provide excellent customer service. Students learn the skills and techniques needed to build and maintain relationships with customers and to provide exceptional customer service. Once a mutually beneficial connection has been established between the professional and the client, the client becomes and remains a loyal customer and advocates for you and your organization.

Another useful communications course is public speaking. Such a course can teach students how to speak with confidence and deliver a relevant and persuasive message. Finance professionals who deal directly with clients must be able to effectively educate while simultaneously persuading the client to accept advice and recommendations. Others, such as auditors, must be able to develop and present research and audit results, typically at executive levels within a company. A course in public speaking teaches students how to engage an audience and keep them focused on the message being delivered.

Communications can make or break a financial professional. To succeed, a professional should be able to qualify his or her communications skills as strong or excellent; good is no longer sufficient for the majority of finance careers.

Computer Course

Today, finance professionals and students taking finance courses are all expected to be proficient in the use of computers as well as in all business productivity tools, such as word processing, spreadsheets, and presentation software. These skills are critical to accountants, auditors, investors, and just about anyone in any finance career. In addition to these business productivity tools, other computer applications used today provide functional and systematic means of managing a large scope of customer and finance data quickly and efficiently. The right finance applications can result in reduced errors and increased employee and overall organizational productivity. Businesses today also rely on software applications that will ultimately improve levels of customer satisfaction and generate growth in the business.

Financial controllers, for example, are accountants who perform a variety of accounting responsibilities, such as financial accounting and forecasting, and who use specialized computer software and systems. Not only should controllers be proficient in the use of their own personal computers, but they should also have a working knowledge of mainframes and minicomputers. Beyond the business productivity software mentioned above, controllers should also be familiar with general ledger and accounting system software, database systems software, software for communications and graphics, operating systems, and programming languages. An example of an accounting computer course would be in accounting information systems, which teaches students about the technology, processes, and controls needed for both internal and external business. The objective of a course in accounting information systems is for the individual to understand all the components that comprise a company’s accounting information system, from the people who run it to the hardware and software used to its network and data components. Students also learn how to prepare and interpret data flow diagrams and flowcharts.

In the insurance industry, underwriters are responsible for deciding if an individual or organization should be able to receive insurance coverage against illness, property damage, and other losses, and if so, the terms under which insurance coverage will be provided. Underwriters must examine potential policy holders and identify and calculate the level of risk to the insurance company if a policy holder suffers a loss. Underwriters are also responsible for determining an appropriate premium as well as writing the policy. Complex insurance software lets underwriters analyze information to determine if a potential risk is manageable for a company or if, to the contrary, the risk can result in a loss to the company. Underwriters rely on applications that provide reports from a variety of other relevant groups, such as medical providers and loss control representatives. The data they provide supports the underwriter in the decision-making process. Underwriters are also required to create specific software rules to use in automated systems that support their decision-making processes. Their computers are also likely linked to various other databases on the Internet so that they have immediate access to specific information, such as a prospective customer’s credit score.

Financial advisor planning software helps financial planners by creating portfolio models for their customers. This software is valuable in that it can also show potential results according to the investment plan used, allowing the client to see a variety of options along with possible earnings. Other wealth management computer software provides financial planning, makes recommendations for investing, and allows the user to execute trades. Finance professionals also use specialized software for managing client portfolios and analyzing clients’ personal finance information to produce customized views and financial management models that are appropriate to each individual client.

Businesses rely heavily on computers and programs; prospective employees should familiarize themselves with job-specific applications.


© 2018 Copyright | FinanceCourseGuide.com | All Rights Reserved