UNIVERSIDAD CATOLICA BOLIVIANA

“SAN PABLO”

MEMBERS:
Carla Andrea Castrillo Reyes
Evelyn Herrera Fernández
Darlyn Carolina Albornoz
Nineth Marquez
MATTER:
English in Common 6
TEACHER:
Banessa Chavarria

GESTION 2020
 ARTICLE
What is Financial Engineering?
Financial engineering is the use of mathematical techniques to solve financial problems.
Financial engineering uses tools and knowledge from the fields of computer science,
statistics, economics, and applied mathematics to address current financial issues as
well as to devise new and innovative financial products.
Financial engineering is sometimes referred to as quantitative analysis and is used by
regular commercial banks, investment banks, insurance agencies, and hedge funds.
How Financial Engineering is Used
The financial industry is always coming up with new and innovative investment tools
and products for investors and companies. Most of the products have been developed
through techniques in the field of financial engineering. Using mathematical modeling
and computer engineering, financial engineers are able to test and issue new tools such
as new methods of investment analysis, new debt offerings, new investments, new
trading strategies, new financial models, etc.
Financial engineers run quantitative risk models to predict how an investment tool will
perform and whether a new offering in the financial sector would be viable and
profitable in the long run, and what types of risks are presented in each product offering
given the volatility of the markets.
KEY TAKEAWAYS
 Financial engineering is the use of mathematical techniques to solve financial
problems.
 Financial engineers test and issue new investment tools and methods of analysis.
 They work with insurance companies, asset management firms, hedge funds,
and banks.
 Financial engineering led to an explosion in derivatives trading and speculation
in the financial markets.
 It has revolutionized financial markets, but it also played a role in the 2008
financial crisis.