Everything you need to know about the Finance Minor

The Finance Minor stands out as one of the most popular minor courses on campus, attracting students across various disciplines who are eager to explore the world of finance and its vast opportunities. Naturally, questions like “Why should I take up the Finance Minor?”, “What are the courses like?”, and “How does it align with PS and placements?” often arise.

Recognizing this, the Economics Association has compiled inputs from several seniors who have not only completed the minor but have also excelled in its courses, many of whom have gone on to take up remarkable roles in their PS-2. These individuals bring a wealth of firsthand experience and practical insights, making this guide a valuable resource for any student considering or currently pursuing the Finance Minor.

In this comprehensive article, we’ll explore everything you need to know, including:

• Why the Finance Minor might be the right choice for you, and how it aligns with your career aspirations.

• Tips and strategies to excel in the subjects, including study techniques and recommended resources.

• How the minor connects to Practice School (PS) and placements, giving you an edge in the professional world.

• Advice on managing credit loads, especially for dualites and those planning early graduation.
  

Whether you’re just beginning to consider the Finance Minor or are looking for guidance on excelling in it, this article aims to address your queries and set you up for success.

Frequently asked questions

Q. What is the Finance Minor?

The finance minor is one of the most important, sought-after and useful minors amongst all the ones offered, when it comes to PS and Placements.

It consists of 6 major courses namely:

• Fundamental of finance and accounting (FOFA)

• Derivatives and risk management (DRM)

• Financial management (FM)

• Business analysis and valuation (BAV)

• Security analysis and portfolio management (SAPM)

• Financial and Risk Management (FRAM)
  

For those students who are pursuing M.Sc. Economics, they don’t need to take up finance minor as such, they can take up the courses as DELs and mention their offshoot score in their resumes for finance placements and PS. 

Q: What is “offshoot” and how important is it to maintain a good offshoot score?

Offshoot is the sum of your grades in the 6 courses (6 * 10 = 60 grade points).

Having a good offshoot score shows your ability and your understanding of the 6 courses so that when it comes to applying these in the real market, you are set with your basics. Moreover it acts as a qualifying criteria for companies. Clearing a certain threshold would allow you to be in the interviews more without much difficulty. An average of 9 grade points (making a total of 54 /60) is considered an excellent score, and should give you an edge, and a sense of security when it comes to roles for PS-2.

Q: What benefits does this minor have over others?

Finance is a dynamic and thriving field, offering immense career opportunities and serving as the backbone of businesses and economies. The course structure of the Finance Minor is designed to be highly market-relevant, providing students with real-world exposure to what truly happens in the financial sector, through engaging projects and case studies. From analyzing market trends and interpreting financial statements to managing risks and making investment decisions, the curriculum bridges the gap between theoretical learning and industry practices. It equips students with critical skills needed to excel in internships, placements, and future careers.

Q: Who should take the “Finance Minor”? 

Anyone with an interest in understanding how markets work or aspiring to build a career in finance should consider pursuing the Finance Minor.

Even if you're unsure about your specific interests, starting with courses like FOFA and DRM can help figure it out along the way. There is plenty of learning in these courses that would be handy in the real world after you graduate.

Q: What are the roles available in the market in PS-2 and Placements?

There are several roles including Risk Analysts, Fin-Tech, Global Markets, Investment Banking, and even ones based around data science. Some well-known companies that come for PS-2 are Nomura, JP Morgan Chase, Morgan Stanley, as well as multiple Investment Banks. Companies like Nomura and Morgan Stanley typically look for 1-year interns and hence they prefer dualities, however most roles in JPMC have no such criteria

Tips to Ace Finance Minor Courses

1. Fundamentals of Finance and Accounting (FOFA)

In the Fundamentals of Finance and Accounting (FOFA) course, it is imperative to thoroughly review the reading materials provided, as the content preceding the midterm is generally more accessible, and performing well in this segment can substantially improve one's overall grade. Students should focus on mastering various calculation methods, particularly those related to bonds, while also committing to memory the theoretical concepts integral to accounting. Given the emphasis on theory in accounting, it is crucial to ensure that key principles are well understood and retained.

2. Derivatives and Risk Management (DRM)

The Derivatives and Risk Management (DRM) course requires consistent class attendance, as certain significant points may not be included in the slides but are covered during lectures. In addition, the course textbook serves as an important supplementary resource for gaining a deeper understanding of complex topics. A thorough understanding of the derivations of essential formulas, such as those related to compensation, is vital for mastery of the course material.

3. Security Analysis and Portfolio Management (SAPM)

Security Analysis and Portfolio Management (SAPM) is a course that focuses on the principles of risk, return, and portfolio management. Students are advised to stay engaged with class material, as the pace of instruction can be fast. A clear understanding of the relationship between risk and return, as well as proficiency in bond and equity management, is fundamental. This course also shares significant overlap with other courses, such as Fundamentals of Finance and Accounting (FOFA) and Financial Management (FM), making a strong understanding of those subjects essential to excel in SAPM.

4. Business Analysis and Valuation (BAV)

The Business Analysis and Valuation (BAV) course is recognized for its practical applications, with a focus on real-world financial analysis and valuation techniques. Students are encouraged to stay informed by reading financial news and reviewing industry trends, as this will facilitate the application of theoretical concepts in real-world scenarios. Analyzing previous year questions (PYQs) is critical for understanding exam patterns, and mastering the use of financial calculators is essential to handle the technical calculations required in the course. Given its integration of principles from both Fundamentals of Finance and Accounting (FOFA) and Financial Management (FM), BAV is pivotal for developing proficiency in business valuation.

5. Financial Management (FM)

The Financial Management (FM) course builds on the foundational principles introduced in FOFA. The first half of the course is primarily focused on quantitative calculations, while the latter portion examines capital structures and financial strategies. Students should practice case studies and previous year questions (PYQs) to enhance their problem-solving abilities. The concepts learned in FM are particularly important from an equity perspective, and they play a significant role in interviews and exams for finance-related positions.

6. Financial Risk Analytics and Management (FRAM)

The Financial and Risk Management (FRAM) course is crucial for students aspiring to pursue careers in risk management or prepare for the Financial Risk Manager (FRM) certification. The course is highly detailed and statistical, requiring a thorough understanding of risk management strategies and concepts such as option strategies, Basel norms, and swaps. While FRAM is largely theoretical, a comprehensive understanding of the material is essential for excelling in exams and for gaining insights into risk-related roles in the finance industry.

You might be wondering: In what order should I pursue these courses? For single Degree students it is recommended to start with FOFA and DRM in 2-1, as these are fairly introductory courses with little prior knowledge required. FM can also be taken up in the second year, as having 4 finance courses in 3-1 would be burdensome. It is recommended to complete all the courses by 3-1 to be eligible for finance roles in Sem-1 PS-2. Dualites besides Economics, would have to take a summer term to complete the minor. 

Some General Tips:

1. Solving PYQs and class questions is a must. 

2. ⁠Conceptual clarity is key (watch YouTube videos to understand if needed, links have been provided in the Resources section).

3. ⁠Teachers usually give hints in class about potentially tricky questions in the exam.

4. ⁠Look into who's the IC for your semester and practice the questions that they tend to ask.

Resourses

Finally, here are a few resources to familiarize yourself with the world of finance:

It is important to know what’s actually going on in the markets on a regular basis. A good way to do this is by reading magazines and papers such as the Economic Times, Mint and Bloomberg Journal.

You can even invest a bit of money in the market so that you’ll automatically keep a watch on how it is behaving and keep an eye on the patterns and trends. The knowledge of Probability and Statistics can help you with some interview questions. For ML and Data Science roles, knowing Python is a must, having an industry relevant project helps as well. Companies also prefer students with some knowledge in Alteryx and Tableau. These are used for data analytics and visualization respectively.

Here are some YouTube channels that you may find helpful:

Business and the Economy: ColdFusion, Money & Macro and Economics Explained

Markets, Finance and Fundamental Analysis: SOIC, Abhishek Kar and Aswath Damodaran

Quant and Python: QuantPy and Quantopian

Data Science and Machine Learning: rithvikmath, StatQuest and 3Blue1Brown

We hope this article has addressed your questions and provided greater clarity about the Finance Minor, its course structure, and how it connects to Practice School (PS) opportunities in finance. Whether you were wondering about why to pursue this minor, how to excel in its subjects, or how it aligns with your career goals, we trust this guide has offered valuable insights to help you make informed decisions.

This article wouldn’t have been possible without the contributions of seniors who generously shared their experiences and expertise. A special thanks to:

• Nehal Nenawati

• Divyesh Agrawal

• Tashvi Argekar

• Deepanshu Garg

• Shubham Birla
  

Compiled by: Vidyesh Panyam, Vatsal Badaya