Financial engineering

 Financial engineering is a process that utilizes

existing financial instruments to create a new
and enhanced product of some type.
 any combination of financial instruments and
products can be used in financial engineering.
 process may involve a simple union between
two products, or make use of several different
products to create a new product that provides
benefits that none of the other instruments
could manage.
 Definition
 Financial engineers use various
mathematical tools in order to
create new investment strategies.
The new products created by
financial engineers can serve as
solutions to problems or as ways to
maximize returns from potential
investment opportunities.
 Definition
 Financial engineering involves the design
development and implimentation of
innovative financial instruments and
processes and formulation of creative
solution to problem in finance.
JHON FINNERTY
 SCOPE OF FINANCIAL
ENGINEERING
 INNOVATIVE CORPORATE FINANCING
 MERGER AND ACQUISITION
 BANKING SECTORS
 TRADING
 INVESTMENTS AND MONEY
MANAGEMENT
 RISK MANAGEMENT
 DRIVING FORCES
 GLOBAL FACTORS  INTRA FIRM FACTOR
 PRICE VOLATILITY  LIQUIDITY NEEDS
 GLOBALIZATION OF THE MARKET  RISK AVERSION
 TAX ASSIMETRIES  AGENCY COST
 TECHNOLOGICAL ADVANCES  ACCOUNTING BENIOFITS
 ADVANCED FINANCIAL THEORY
 COST OF INFORMATION
 COST OF TRANSACTING