<p>Recently I found universities offering a MS in Finance. I am interested in Finance and the MS is three semesters long and the tuition seems lower as well. They also seem to have good career placement as indicated by Carnegie Mellon's Website below. So What are the main differences between the two degrees and the pros and cons?</p>
<p>The Carnegie Mellon program is for traders. It is one of the best programs in the world for entering into S&T. Ibankers usually get MBAs. That program is very quantitative and deals with pricing advanced derivatives and other financial tradable instruments. MBAs usually deal a lot with leadership, business plans, valuations etc. Traders dont usually get MBAs, many dont even get any more advanced degree after the bachelors. However, many traders especially the arbitrage folks get degrees in MSCF like at Carnegie.</p>
<p>The people I know who took that Carnegie Mellon program, and others like it, were not traders. They were what we call "quants". People who make complex mathematical models to analyze hedging strategies, option and trade valuation, trading position risk exposures, things like that.</p>
<p>Quants frequently support traders, but they are not traders, and vica versa. Many traders of my aquaintance are more intuitive than academically analytical. Although they may be quite good at doing elementary arithmetic in their heads. The quants may have been Physics majors as undergrads, while the traders played poker a lot.</p>
<p>The quant degree is perhaps preferable if you want to be a quant.</p>
<p>An MBA is quite different. In this program the idea is that students are being given a backgound useful for running businesses, not running numbers. Every MBA takes courses in diverse areas of business- marketing, operations management, economics, organizational behavior, accounting- not just finance. In the MBA finance concentration the courses will likely be less mathematically and computationally sophisticated than in the quant program. But they have more emphasis on using the theory in solving business problems. The MBAs will probably have more group projects, writing-oriented classes, and opportunities for oral presentations.</p>
<p>Typically MBAs wind up running things. Quants are quants. Financial engineers, if you will.</p>
<p>The MBA degree is better if you aspire to more of a generalist job, and not a financial engineering job. And if you want a broader business education outside of finance. And if you want training in management.</p>
<p>Reading Mahras2's post above, there are definitely areas of trading where some quants do become traders, and arbitrage would be a likely area. Basically the areas that are most mathematically and theoretically complex would be the likely areas. Many quants don't really have the temperament for trading though. People who like to precisely model things and calculate everything out are not always that comfortable with the need to make gut decisions in an environment ruled by uncertainty.</p>
<p>Yea I know they become quants but in my head I often confuse those guys with traders lol. The more complex the financial instrument is the more quants play a lead role. If you want a forum for quants google "Wilmott Forums". I visit there from time to time although the mathematics they use in the forum is just too advanced for me to use. Areas where quants are strongly recruited at are: automated system trading at places like DE Shaw, in Equity Derivatives desks at ibanks, and arbs.</p>
<p>If you're not sure whether you want an MBA or something in finance, you could hedge your bets by doing both. </p>
<p>For example, MIT offers the Financial Technology Option certificate to all MIT graduate students. So you could get your MBA from the Sloan School as well as the FTO certificate. OK, true, a certificate is not as the same thing as getting a formal degree in finance, but it's not that far off. After all, not only are we talking about MIT here, but the FTO program is run out of the Computer Science department of MIT, so I think that it's safe to say that the program is extremely technically rigorous. </p>