Revolutionizing Financial Engineering Education: Simulation-Based Strategies for Learning

Matt Olfat; Kari Wold; Roy Lee Hayes; Mark Endel Paddrik

Download Paper | Permalink

Conference: 2013 ASEE Annual Conference & Exposition
Location: Atlanta, Georgia
Publication Date: June 23, 2013
Start Date: June 23, 2013
End Date: June 26, 2013
ISSN: 2153-5965
Conference Session: Intercollegiate and Cross-disciplinary Collaboration
Tagged Division: Multidisciplinary Engineering
Page Count: 29
Page Numbers: 23.1047.1 - 23.1047.29
DOI: 10.18260/1-2--22432
Permanent URL: https://peer.asee.org/22432
Download Count: 680

Paper Authors

biography

Matt Olfat University of Virginia

visit author page

Matt Olfat is a Systems Engineering and Financial Mathematics double major at the University of Virginia. He is involved in a lot of activities throughout grounds, such as the Engineering Student Council and the Financial Decisions Engineering Group, and have a strong interest in Finance and Financial Engineering.

visit author page

biography

Kari Wold University of Virginia

visit author page

Kari Wold is a doctorate student at the University of Virginia focusing on instructional technology in education. She has taught writing for 7 years online at a university serving students from around the world, and she has published in and has presented on international education, engineering education, blended learning, and online learning. Wold’s primary interests focus on global education, methods of online education, and curriculum design. She has degrees in journalism and economics from the University of Minnesota as well as a master’s degree in international education from George Washington University.

visit author page

biography

Roy Lee Hayes Jr University of Virginia

visit author page

Roy Hayes is a PhD Candidate at the University of Virginia. He completed a Bachelors of Science in Aerospace and Systems Engineering at the University of Virginia in 2009. His research focuses on implementing machine learning techniques to Identify opponent strategies in game theoretical situations. Currently, Roy is applying Inverse Reinforcement Learning to uncover trading strategies in the commodity markets.

visit author page

author page

Mark Endel Paddrik University of Virginia

Download Paper | Permalink

Abstract

Revolutionizing Financial Engineering Education: Simulation- Based Strategies for Learning On May 6, 2010, world financial markets experienced The Flash Crash,which affected trillions of dollars of securities in just mere minutes. Consensus ofwhat caused this dramatic change in the market evaluation of thousands of assetsis still not fully understood. To tackle problems like these, financial engineeringstudents need a comprehensive understanding of complex market microsystems.These students must have a multidisciplinary skillset that incorporates an ever-widening array of disciplines to address markets that have grown increasinglytangled. Fundamental understanding of today’s financial markets requiresstudents take courses in statistics, mathematics, computer programing, finance,and economics; however, due to the limited material that a single course cancover, traditional coursework cannot effectively teach the multidisciplinarycompetencies that are necessary. In order to reduce the course load yet still learn fundamental financialengineering principles, we suggest taking a constructivist approach using marketsimulations as teaching tools. Simulations allow financial engineering students tolearn the complex nature of markets more comprehensively and effectively byallowing them real-world experience in controlled, guided environments.Research supports their use and has shown simulations engage students and givethem real-time knowledge of cause and effect in a complex marketplace.Moreover, they go beyond simply providing factual knowledge to offeringstudents experience operating in the microstructure of markets. This environmentalso forces students to encounter unanticipated situations that traditionaleducation methods do not allow. In that spirit, this paper will present the use of simulations in an“Introduction to Financial Markets and Trading Strategy Development” coursethat will teach students how to devise and implement their own trading strategies,as well as give them invaluable experience in integrating the basics of statistics,programing, and design. This paper adds to the body of research that illustratessimulations have the ability to get students emotionally invested in learning andthereby more receptive to the minutia of financial markets and trading techniques.Simulation-based education can augment traditional education methods byproviding a learning environment that promotes more skills and techniques tofoster better fundamental knowledge.

Citation
Format

Olfat, M., & Wold, K., & Hayes, R. L., & Paddrik, M. E. (2013, June), Revolutionizing Financial Engineering Education: Simulation-Based Strategies for Learning Paper presented at 2013 ASEE Annual Conference & Exposition, Atlanta, Georgia. 10.18260/1-2--22432

TY  - CPAPER
AB  -   Revolutionizing Financial Engineering Education: Simulation-                       Based Strategies for Learning       On May 6, 2010, world financial markets experienced The Flash Crash,which affected trillions of dollars of securities in just mere minutes. Consensus ofwhat caused this dramatic change in the market evaluation of thousands of assetsis still not fully understood. To tackle problems like these, financial engineeringstudents need a comprehensive understanding of complex market microsystems.These students must have a multidisciplinary skillset that incorporates an ever-widening array of disciplines to address markets that have grown increasinglytangled. Fundamental understanding of today’s financial markets requiresstudents take courses in statistics, mathematics, computer programing, finance,and economics; however, due to the limited material that a single course cancover, traditional coursework cannot effectively teach the multidisciplinarycompetencies that are necessary.       In order to reduce the course load yet still learn fundamental financialengineering principles, we suggest taking a constructivist approach using marketsimulations as teaching tools. Simulations allow financial engineering students tolearn the complex nature of markets more comprehensively and effectively byallowing them real-world experience in controlled, guided environments.Research supports their use and has shown simulations engage students and givethem real-time knowledge of cause and effect in a complex marketplace.Moreover, they go beyond simply providing factual knowledge to offeringstudents experience operating in the microstructure of markets. This environmentalso forces students to encounter unanticipated situations that traditionaleducation methods do not allow.       In that spirit, this paper will present the use of simulations in an“Introduction to Financial Markets and Trading Strategy Development” coursethat will teach students how to devise and implement their own trading strategies,as well as give them invaluable experience in integrating the basics of statistics,programing, and design. This paper adds to the body of research that illustratessimulations have the ability to get students emotionally invested in learning andthereby more receptive to the minutia of financial markets and trading techniques.Simulation-based education can augment traditional education methods byproviding a learning environment that promotes more skills and techniques tofoster better fundamental knowledge.
AU  - Matt Olfat
AU  - Kari Wold
AU  - Roy Lee Hayes Jr
AU  - Mark Endel Paddrik
CY  - Atlanta, Georgia
DA  - 2013/06/23
PB  - ASEE Conferences
TI  - Revolutionizing Financial Engineering Education: Simulation-Based Strategies for Learning
UR  - https://peer.asee.org/22432
DO  - 10.18260/1-2--22432
ER  -