Chapter 16
Financially Engineering Yourself Deeper Down the Rabbit Hole
IN THIS CHAPTER
Understanding what financial engineering entails
Creating hybrids
Bundling and unbundling assets
Exploring exotic financial products
Checking out the technology behind portfolio engineering
Financial engineering is nothing more than the creation of new and interesting financial tools, often accomplished through the use of mathematic modeling and computer engineering. Financial engineering is really where the majority of innovation is occurring in the field of finance. Financial engineering is a bit like the science lab of the world of corporate finance, where new ideas are developed and tested. These innovations may include new types of analytics, new investments, new debt, new transactions methods, new strategies, new types of accounts, and new ways for corporations to improve their financial efficiency and overall financial well-being — assuming, of course, that they know how to utilize the ...
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