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Financial Engineering and Management Transfer minor

Specialisation of: MSC Industrial Engineering and Management

This transfer minor is for all students who want to learn more about the Industrial Engineering and Management field and want to prepare for the Master Industrial Engineering and Management (IEM).

The master Industrial Engineering and Management has three specializations:

  • Production and Logistics Management (PLM)
  • Health Care and Technology Management (HCTM)
  • Financial Engineering and Management (FEM).

Financial Engineering and Management (FEM).
Over the past decade, the increasing complexity of financial products, the size of the markets, and the ever increasing variety in the products traded have generated a growing demand for skilled professionals to create, price and hedge complex derivatives and, more generally, to manage risk. Acquiring such skills requires mastering both mathematical and managerial knowledge. To meet this demand, the Department of Financial Engineering (in co-operation with the Department of Applied Mathematics) offers a master’s track in financial engineering and risk management. Students are trained to identify and quantify risk. Moreover, they should be able to determine the extent to which risk should be dealt with using financial engineering instruments or other types of solutions, such as reengineering business processes, adapting the firm’s strategy, switching customers/suppliers or taking different investment decisions. Students will also benefit from comprehensive management training, learning to apply strategic skills to manage the firm’s innovation and technology.

Leerdoelen

Academic skills (including Research Methodology):
After the first quartile, the student understands the concepts and principles of the managerial problem solving method and business research methods, and their inter-relationships. Additionally, the student knows the main issues of doing good academic research.

After the second quartile, the student has applied the managerial problem solving method and business research methods to a case, thereby learning how to:- derive a clear research question from a complex business situation- relate IEM-related theory to actual business practice- translate theoretical and fuzzy concepts into measurable variables- develop evaluation and performance criteria for alternative solutions- apply multi-criteria analysis to determine the best solution(s)- assess conditions and actions to ensure successful implementation of solutions in business- write a concise and clear research report for business.

Calculus A 

  • formulate definitions and properties of functions of one variable;
  • calculate limits, for instance to demonstrate continuity or to calculate the derivative with the definition;
  • calculate the derivative of a function, and also to calculate extreme values and inflection points;
  • reproduce the definition of continuity, differentiability and integrability of functions of two variables;
  • reproduce the definition of the partial derivative of a function of two or more variables;
  • apply the chain rule for functions of more than one variable;
  • calculate the directional derivative and the gradient vector, and to apply the rules for the gradient;
  • find the extreme values of functions of more than one variable;
  • solve first order differential equations.

 Statistics and Probability:

  • The student knows and can apply elementary statistics and probability, like conditional probabilities and independence.
  • The student knows about the probability distribution of one or multiple stochastic variables and the characteristic elements like expectation, variance and correlation coefficient and can calculate probabilities and measures in practical examples.
  • The student knows basic distributions for numbers (discreet) and interval variables (continuous), among others the normal and binomial distribution and recognizes these and can apply them in described practical situations.

Financial Engineering:

These goals relate to the following four topics.

  1. Valuation: the main principles of financial valuation, and the application of valuation techniques in determining the value of bond, shares, firms as well as simple financial options:
  • The concept of Net Present Value (NPV), and its computation by Discounted Cash Flows (DCF) for a variety of cash flow patterns;
  • The role of diversification in valuation, as addressed in the standard portfolio models of risk-return tradeoffs (Capital Asset Pricing Model, Arbitrage Pricing Theory), and the corresponding computational techniques;
  • The first principles of option pricing in an elementary setting of binomial trees, and their application to simple options and futures contracts.
  1. Accounting / performance: interpretation of real world financial figures related to (external) financial accounting and (internal) management accounting:
  • a company%u201Fs annual report, in particular the financial statements (balance sheet, profit-loss, cash flow statement), and relate it to the valuation principles involved;
  • financial ratios as performance indicators;
  • the role of cost allocation in performance indicators; activity-based costing and direct costing at elementary level.
  1. Decisions / management: principles underlying financial and investment decisions:
  • The effect of financial decisions, in particular dividend and debt policy, on the value of a firm (Modigliani-Miller theory, tradeoff theory, pecking order theory);
  • The NPV rule for investment decisions, including the incorporation of tax-effects in the Weighted Average Cost of Capital (WACC) or Adjusted Present Value;
  • Formulation of financial goals, with attention for their congruence and the concept of affordable growth;
  • Working capital management.
  1. Financial markets: financial markets and their role in corporate finance:
  • organization of markets, regulation, supervision, role of AFM;
  • role of financial markets as catalyst and benchmark; concept of market efficiency;
  • financial products: shares, bonds, some derivatives (futures, put-and call options).             

Operations Strategy:

  • The student has knowledge of and insight in the basic principles of production management such as the relationship between company strategy, operations strategy and design of the production system;
  • The student can analyze and solve (simple) problems in a production process;
  • The student has knowledge of and insight in the main principles of planning and controlling the production process and the role of quantitative modeling as support tool;

Excel/Visual Basic

Knowledge of and skills to use the basic and intermediate level features of the MS Excel spreadsheet software, covering topics like: tables, pivot tables, graphs, formula manipulation, worksheet layout and (conditional) formatting, proposition logic in formulas, use of basic Excel formulas for data retrieval and manipulation.

Basic programming skills using the VBA for Excel programming language, covering topics like: building and running macros, debugging, building subs and functions, local and global variable declaration, loops (for, while, repeat), proposition logic (if then else), Excel worksheet data manipulation (input and output)

Aanvullende informatie

This minor is offered by the University of Twente. Lectures will take place on the Campus of the University. The language of this transfer minor is English.

After graduation of your HBO Bachelor and this minor you are admissible for the Master Industrial Engineering and Management with the specialization FEM.

The learning agreement signed by the student and his/her Examination Board must have reached the UT contact person before the enrollment ends.

Email the learning agreement + necessary documents to: m.g.vandermeulen@utwente.nl.

After graduation of the Master Industrial Engineering and Management you are capable in optimizing high technological (business) processes.

Ingangseisen

One of the conditions for admission, is to demonstrate proficiency in Mathematics B at pre-university level (VWO).

Students who do not meet the mathematics criteria can upgrade their deficiencies, e.g.:

When you do not meet the condition of demonstration the proficiency in Mathematics B at pre-university level (VWO) before the start of the transfer minor you will NOT be admitted to the transfer minor. 

Documents you also need to submit together with your signed learning agreement.

  • Proficiency in Mathematics B at pre-university level (VWO)
  • Up-to-date grade list of your current HBO programme
  • English motivation letter. (Explain clearly why you would like to take this transfer minor and the specialization you prefer.

Applicants are also assessed on the content of their current HBO programme and the obtained grades.

This transfer minor is only available for students with a related technical bachelor programme, such as Mechanical Engineering, Civil Engineering, Industrial Design, Electrical Engineering etc.
Always check the www.doorstroommatrix.nl 
In some cases the programme management can make an exception for non-technical and / or non-related programmes.

HBO Bachelor Industrial Engineering and Management can be related, but this is not always the case.

It is important to know that you need to have completed already 120 EC’s from your current bachelor’s programme (including the complete first year) before you can start this transfer minor. We will verify this, based on the grade list you’ve provided.

We recommend you to only follow up with this transfer minor, if your average grade is at least 7.0-7.5 at your HBO programme. This transfer minor is meant for students with the motivation and the ability to achieve an English programme at academic level.

Brush up on English

The IEM programme is taught in English. We strongly advise you to test your level of English.

Take the diagnostic Dialang test on http://dialangweb.lancaster.ac.uk/. This test gives you insight into where you stand in understanding English, in listening, writing, reading, vocabulary and language structures. The test will take up about 105 minutes of your time. The assessment will result in a baseline measurement of your English proficiency, as well as in potential points for improvements.

Bear in mind that the required level of English is at least C1 on each separate subject. When you don’t meet these requirements, we recommended you to freshen brush up your knowledge of English before starting with the pre-Master’s programme.

Toetsing

The ECTS and examination of the courses.

Calculus A (191512001, 4 EC) Exam
Academic skills for premaster IEM (5 EC) Assignment (individual)
Financial Engineering for premaster IEM courses (total 10 EC)  Exam + group assignment
Statistics and Probability (5 EC) Exam
Excel/VBA (3 EC) 2x Exams
*Operations Strategy (3 EC) Exam
Project OM for premaster (3EC) Assignment (group)

 * Students with prior knowledge on this topic will have to do Project OM for premaster.

Per course you can take one exam and one re-sit.
If the premaster program is not finished successfully during one academic year, admission to the master program is not possible anymore.

Students in special circumstances have to ask the Examination Board for exemptions on the above mentioned rules. The Examination Board decides on individual issues as presented by the student.

Literatuur

Below you find the literature you will need for the premaster courses, as far as they are known at the moment of writing. You can order your books, with discount, via the study association STRESS. But first you have to register as a member of STRESS, see https://www.stress.utwente.nl/

Calculus A: Thomas' Calculus, early transcendentals, G.B. Thomas, M.D. Weir and J.R. Hass New International Edition, ISBN 9781783991587

Academic skills for premaster: 'Geen probleem: Een aanpak voor alle bedrijfskundige vragen en mysteries’, by Hans Heerkens & Arnold van Winden or Business Research Methods, and Skills Sheets (Ten Tulder)

Financial Engineering for premaster IEM: Brealey, Myers and Allen, Principles of Corporate Finance, most recent international edition, with access to the self-study tool Connect. (ISBN 9780077155070) and online articles

Excel/VBA: online material

Statistics and Probability: online material and Applied Statistics and Probability for Engineers” by D.C. Montgomery and G.C. Runger (5de edition, ISBN 978-0-470-50578-6)

Operations Strategy: Slack, N., Chambers, S., & Johnston, R. (2010). Operations Management (7th ed.). Harlow: FT Prentice Hall

Rooster

This transfer minor is a full-time programme, lectures may be scheduled on any (working) day of the week.