Financial engineering

The creation of new and improved financial products through innovative design or repackaging of existing financial instruments.

Investopedia Says:
Financial engineers use various mathematical tools in order to create new investment strategies. The new products created by financial engineers can serve as solutions to problems or as ways to maximize returns from potential investment opportunities.

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Application of economic principles to the dynamics of securities markets, especially for the purpose of structuring, pricing, and managing the risk of financial contracts.

Financial engineering is a multidisciplinary field involving financial theory, the methods of financing, using tools of mathematics, computation and the practice of programming to achieve the desired end results.

The financial engineering methodologies usually apply social theories, engineering methodologies and quantitative methods to finance. It is normally used in the securities, banking, and financial management and consulting industries, or as quantitative analysts in corporate treasury and finance departments of general manufacturing and service firms.

Financial engineering can also refer to:

• Computational finance
• Financial reinsurance

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