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Financial Engineering: The Evolution of a Profession by Cara M. Marshall, Tanya Beder

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Chapter 2

Careers in Financial Engineering

Spencer Jones

SBCC Group, Inc.

INTRODUCTION

The evolution and growth of financial engineering as a profession has been accompanied by an ever-increasing demand for qualified job candidates. The field is interdisciplinary and had existed under a number of different, sometimes inappropriate, labels for some time before industry and academia finally settled on the more accurate descriptor of “financial engineer.” The roots of financial engineering trace back to major theoretical contributions made by financial economists during the 1950s, 1960s, and 1970s. They include names like Harry Markowitz, Merton Miller, Franco Modigliani, Eugene Fama, William Sharpe, Myron Scholes, Fischer Black, Robert Merton, Mark Rubinstein, John Cox, Stephen Ross, and many others that walked with them or followed the trail they pioneered. These men brought a new set of tools and a more scientific approach to finance to our understanding of financial markets, financial products, and financial relationships. However, as important as these contributions were in planting the seeds for a new profession, the blossoming of that profession did not occur until the financial markets began to experience an influx of highly skilled professionals from other, traditionally more quantitative, disciplines. These new entrants to the financial markets included ever more physicists, mathematicians, statisticians, astrophysicists, various types of engineers, and others who shared ...

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