Does finance include a lot of math?
Some of the main math-related skills that the financial industry requires are: mental arithmetic (“fast math”), algebra, trigonometry, and statistics and probability. A basic understanding of these skills should be good enough and can qualify you for most finance jobs.
Finance is about money, and money requires math. However, most financial professionals only need basic knowledge in algebra and simple rules such as the order of operations to excel in their job.
In general, mathematical finance can involve a very considerable amount of pure mathematics. A big piece is modeling assets via stochastic processes, and to understand those properly requires a firm background in graduate-level real analysis, measure theory, probability theory, and often functional analysis and PDE.
Financial Mathematics is the application of mathematical methods to financial problems. (Equivalent names sometimes used are quantitative finance, financial engineering, mathematical finance, and computational finance.) It draws on tools from probability, statistics, stochastic processes, and economic theory.
Generally speaking, people consider accounting majors to be more difficult to study and pass than finance majors. And there are a few different reasons for this. The content of accounting majors is, on average, much more technical than for finance majors, and this can make it more difficult.
While finance requires some mathematics training and some knowledge and skills in accounting and economics, it's not necessarily more difficult than any other field of study, particularly for people with an aptitude for math.
Finance requires more math
“There are a lot more complex formulas and math to work with when you are in finance,” McBride explains. “With accounting, it's more basic math needed to put the pieces of a financial story together.”
Based on NACE data, those who had a bachelor's degree in finance tend to have slightly higher starting median incomes than those with accounting degrees. In 2019, the median starting salary for finance majors was $57,750. On the other hand, the median starting salary for accounting majors was $57,250.
Most students find a finance degree difficult because of the moderately complex mathematics involved, the interdisciplinary approach, and the unfamiliar concepts and vocabulary included in the major. Finance is not only the study of the stock market or money. It is a much more comprehensive subject than that.
- Strong Accounting foundation: ...
- Knowledge of financial reporting. ...
- Budgeting. ...
- Forecasting. ...
- Data Analysis. ...
- Readiness for Fin Tech. ...
- Inclination towards innovation. ...
- Takeaway.
Which is harder computer science or finance?
Many people consider computer science to be one of the most difficult fields to study. The field of finance requires mathematics training as well as knowledge of accounting and economics, but this is not necessarily more difficult than any other.
Finance can be a fiercely competitive field. After all, it's a famously high-paying industry known to deal out six or seven figures in salaries and bonuses for those at the top. Even those on the bottom rung can expect to start at a good wage compared with other fields.
You don't need to be a maths genius to be an Accountant. Of course, just like most jobs, you'll be expected to have a basic understanding of maths. And it certainly helps if you have an interest in numbers. But you don't have to be able to solve complex maths problems in your head to be a good Accountant.
In other words, finance helps us make better decisions with our money and accounting enables us to keep track of it. You use finance in innumerable everyday financial scenarios, such as: Making a budget for your groceries. Deciding how much of your paycheck you want to save and how much you want to invest or spend.
- Psychology.
- Criminal Justice.
- English.
- Education.
- Religious Studies.
- Social Work.
- Sociology.
- Communications.
While you won't need to learn complex advanced mathematical theories, you will need to develop strong analytical abilities and enough of a background in algebra, calculus and statistics to apply concepts of these math branches to the finance field.
On the economics side, calculus also comes into play which is more difficult than the math that you get into on the finance side which is mainly just algebraic equations at the undergrad level. You can check out a video about the difference between finance and economics below.
While there will be another majority of people who consider economics as something harder than finance. In general, economics is harder for people who are more oriented toward accounting and mathematics. The analytical and critical thinkers with no interest in mathematics often find economics a harder subject.
Based on NACE data, those who had a bachelor's degree in finance tend to have slightly higher starting median incomes than those with accounting degrees. In 2019, the median starting salary for finance majors was $57,750. On the other hand, the median starting salary for accounting majors was $57,250.
