A new introductory project has been developed with the aim to motivate first year undergraduate students. To achieve this, the project has strong connection to real life applications, applies mathematics that are taught during the first year and the project is flexible enough to always allow a successful delivery. The application is in finance where the students without prior knowledge determine equity statistics, optimal portfolios, portfolio risk and the properties of a derivative portfolio in the Reuters financial real-time system PowerPlus Pro. To determine this, the students have to apply knowledge from linear algebra, statistics, optimization, and calculus. Our experience is that the students have been highly motivated since it is evident that this is an important problem that they actually can solve with their recently obtained knowledge. It can be concluded that this introductory project in Financial Engineering can be successfully used in the CDIO framework for first year undergraduate students.
AN INTRODUCTORY PROJECT IN FINANCIAL ENGINEERING
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Conceive
Defining customer needs; considering technology, enterprise strategy, and regulations; developing concepts, techniques and business plans.
Design
Creating the design; the plans, drawings, and algorithms that describe what will be implemented.
Implement
The transformation of the design into the product, including manufacturing, coding, testing and validation.
Operate
Using the implemented product to deliver the intended value, including maintaining, evolving and retiring the system.
