An Overview of the Finance Degree

An Overview of the Finance Degree


According to the Georgetown University Center on Education and the Workplace, a finance degree is the tenth most popular degree pursued by students in 2011. It is one of five business related degrees in the top ten list. The recent trend towards pursuing business degrees is an interesting phenomenon which requires several explanations for its existence. For this article, I will focus specifically on the finance degree and one particular career path that can be taken from it; investment banking. To examine the reasons behind the increased interest in finance degrees, one must establish what goes into earning this degree.

Finance Degree Curriculum
A finance degree basically teaches students how to effectively manage money, whether for personal finances or a corporation’s. There are several important concepts that must be taught in a finance degree including:

Students majoring in finance must take core courses within a business curriculum and these generally include classes in accounting, business law, management, marketing, statistics, and mathematics. These are intended to ground students in the fundamental aspects of business so they are not one dimensional in their careers.
Some of the most important concepts students will learn include bond pricing, time value of money, stock/dividend growth model pricing. These are imperative to the every day job of a finance major in many facets of their post-graduation careers.
After taking courses that teach these basic concepts students can generally choose to model their education to their own specifications. They can choose from a variety of finance elective courses such as venture capitalism, real estate finance, portfolio analysis, and many others.
Investment Banking, What is It?
Investment banking is a segment of banking which works exclusively with corporations and large organizations to raise funds. Investment banks provide capital and advisory services for corporations regarding issues such as debt offerings, mergers and acquisitions, and stock offerings among other things.

What Does a First Year Analyst Do?
If you are hired as a first year investment banking analyst be prepared to do a large amount of work. Most of your duties will be to support your boss, the managing director, in their endeavors to land deals for prospective clients. You will be crunching numbers on excel and creating macros in VBA to assist in this process. You will be creating pitch books, which are basically documents that try to convince potential clients to choose your investment bank.

These duties all contribute to work weeks which are typically double that of the average time other people spend at work. It is not uncommon for a first year investment banking analyst to work more than one hundred hours per week.

Rewards of Working in Investment Banking
While there are extremely long hours and much grunt work, the rewards are also quite significant. Investment banking salaries plus the average bonus result in a total yearly compensation of more than $100,000. This is considerably more than what the average undergraduate will make after exiting college. The work that you do as an analyst will also prepare you for a variety of other careers as it demonstrates your ability to work under pressure and deadlines.  As far as pursuing investment banking, the choice is yours; do the benefits outweigh the large amount of work?