What it’s about:

The finance major provides you with a general understanding of financial decision-making and an insight into the way financial markets perform. Emphasis is on the financial management function in firms and not-for-profit organizations, the valuation of financial securities, and the appropriate management of financial risk.

What the study of this major is like:

In many business schools, finance classes are offered only to students in their second year or higher; because of the technical nature of the material, you’ll need to have mastered a number of foundation courses. During your first two years, your general education requirements usually include mathematics, humanities, natural sciences, and social sciences courses. Most programs also require three to six credits each of economics, statistics, and accounting.

After completing the prerequisites, majors take introductory courses in finance and other functional areas of business, such as accounting, management, marketing, and management of information systems (MIS). Usually you must also take one or more courses in financial management/corporate finance and in financial institutions and markets, most of them taught in a large lecture format.

Your first finance course will probably focus on corporate financial analysis, as well as on valuation principle for financial assets such as stocks and bonds. Emphasis is on the tools of analysis, including the evaluation of financial statements and the time value of money calculations. Subsequent classes cover investments and portfolio management, corporate finance, banking and financial institutions, and international finance. They you’re likely to take smaller classes or seminars on a variety of finance subspecialties that interest you. Because of the critical relation of economics and accounting to finance, most finance programs require at least 12 to 15 semester hours of course work in both economics and accounting.

Many finance courses require the use of computers for problem solving, to improve your facility with spread-sheet programs, statistical and financial analysis, financial forecasting, and the preparation of financial reports. Elective may be in statistics, economics, accounting, computer applications, and communications.

Most of your classes will demand a level of familiarity and comfort with quantitative analysis. This subject area may well be your biggest challenge. The style of teaching varies according to subspecialty. Most advanced corporate finance and financial management courses are taught by means of case analysis; you are presented with a situation and, either individually or as a group, you prepare a presentation. Some areas (particularly derivative securities and future and options classes) are math-oriented; if you have not covered precalculus or other advanced math in high school, you may have to play catch-up.

Programs typically differ on whether they emphasize financial markets, investment and financial management, or corporate finance. The split will often reflect the college’s evaluation of job opportunities in the locality. For example, colleges close to financial centers may stress financial markets and investments, on the assumption that many graduates will head for the financial services sector. Colleges in other regions may emphasize financial management, on the assumption that most graduates will seek employment in the finance in the finance departments of nearby corporations.

Career options and trends:

Stockbroker; security sales representative; financial analyst; investment banker; commercial banker portfolio or mutual fund manager; financial planner, government regulator.

To be a stockbroker or to engage in securities sales and trading, you must pass the general securities registered representative examination (Series 7), administered by the National Association of Security Dealers (NASD). Portfolio managers and other investment management professionals typically acquire the postgraduate chartered financial analysts (CFA) certification, administered by the Association for Investment Management and Research (AIMR). Certification requirements for other positions very on a state-by-state basis.

Employment in the financial services sector will always be affected by the state of the economy on Wall Street. Demand for financial analysts and personal financial advisors, however, is projected to grow modestly over the next decade, according to the Bureau of Labor statistics. Increased government oversight of the securities industry should create job opportunities in regulatory agencies.

A sound training in finance is considered useful for any general management position. Banks often employ finance majors in a variety of areas, from corporate lending to trust operations. Corporations hire graduates as financial managers, as financial controllers, or in international financial operations. Brokerage and investment banking firms offer opportunities as account executive or financial consultants for clients. Insurance companies and real estate developers also offer entry-level opportunities. Competition can be tough in this field, and those with an MBA or other certifications will have the best employment prospects.

Source: CollegeBoard 2012 Book of Majors