Bitcoin, fintech, high-frequency trading… The Financial Engineering major is always adapting to the latest banking industry trends and evolutions of the job market of this ever-growing sector.
Throughout the course, fourth-year engineering students work on group projects submitted by companies. Here are three of them related to finance.
A decision-making application for pension fund subscriptions
A pension fund is a investment financial product, more often meant to generate a capital for retirement. Popular in Anglo-Saxon countries, they are only legal as additional pensions in France, where the retirement system is based on a pay-as-you-go system. With this decision-making application, students wanted to make up for the relative ignorance of individuals on these pension funds topics, while helping analysts to inform and sell the products. The application is an intermediary between an analyst and a customer.
This interactive analysis tool enables the analyst to present the client with diverse scenarios depending on whether the latter wants to take risks or not.
The analyst can use the interface to adjust parameters related to invested capital and maturity of investment, creating intuitive graphics. Three scenarios come up: no risk investment, moderate risk and high risk. The client will understand the graphics at a glance and will be able to make a decision more easily.
Priceindex, a mobile app for the valuation of stock index options
Stock index options have created new opportunities for investors and banks to manage portfolio risk. Students working on the Priceindex app aimed to show the difference between European and American values, by using two option pricing major models: the Black-Scholes model and the binomial price tree model. They are based on the same theories but still differ.
After collecting data on S&P500, CAC40, DAX and NASDAQ before, during and after the 2007 crisis, the student group created two Excel VBA files to understand how European and American index work. Based on their results, they decided to launch a mobile app.
Pricindex enable users to price a call or put option: if it is European they will use the Black-Sholes model, if it is American, they will select the binomial price tree model.
There were previously no existing application dedicated to such a specific pricing. Students created Pricindex with Android Studio, using Java language.
Financial backtest using the Django software
Students worked on a backtester website using Django, a free and open-source web framework written in Python.
The backtester is an algorithm which aims to test several financial strategies, enabling the user to know how efficient these strategies have been in the last five years, based on their historical data.
Three parameters are taken into account in the backtester: first, the user must choose an action to test a strategy. Then, he or she must decide on a starting bid for the investment. Finally, he or she must decide which strategy he or she wants to test. The backtester will then display a detailed chart based on all the parameters, summing up the profits and performance of the tested strategy.
Interested in the Financial Engineering major or the Fintech and Capital Market fifth-year options ? Learn more here.