Certificate in Quantitative Finance (CQF) Exam – If you have always dreamed of doing a financial engineering programFinancial Engineering ProgramFinancial engineering is a field that needs someone who is a jack of all trades. However, to solve the issues in finance, an individual needs to peep into other disciplines like applied mathematics, computer science, statistics, and economic theory.read more, but don’t know where to look, the Certificate in Quantitative Finance (CQF) program is for you. This is the right course for you if you plan to go into core domains like IT, insurance, risk management, or quantitative trading. You can complete this part-time financial engineering program within six months.

In this article, we will go in-depth about the particulars of the course. You will get to know why you should go for this course, the fees of the program, the subjects to be studied, how the course is being modeled, how you should prepare for the CQF exam, the pros and cons of the program, and finally, whether this is the right course for you to be more employable in the marketplace.

What is a Certificate in Quantitative Finance (CQF)?

CQF is a part-time financial engineeringFinancial EngineeringFinancial engineering is field which uses mathematical techniques, financial theories, engineering tools and advanced programming techniques to solve critical and complex financial problems.read more program that is delivered and taken online. It is designed for in-depth training for professionals and students who want to make their careers in derivatives, IT, quantitative tradingQuantitative TradingQuantitative trading is a computer software-based trading strategy that uses mathematical models and calculations to assess patterns and trends in the movement and behaviour of stocks to pick undervalued stocks at the right time and make a profitable trade execution.read more, insurance, financial model validation, or risk management.

TThe course is being modeled to enhance maximum learning so that all the students can use the curriculum for the most effective application.

Here’s the graphical representation of the same. The picture below gives you an idea of how the CQF course is being designed.

source: CQF

CQF is designed not only by emphasizing what needs to include in the program but also by what needs to include before and after the program.

Not everyone who wants to do CQF would be acquainted with the subject materials of the course. Thus, before you take the course, you can take three subjects as primers.

You would be able to study basic Mathematics, Python, and Finance and would be able to refresh your knowledge. For advanced students who don’t need CQF, Primers can skip them as these are optional.

In the CQF program, you can take the full course or split it into two levels. That way, you will be in constant touch with the subject matter and gradually will be able to update your knowledge base and apply the same in your respective professional field. After the program, you will have the opportunity for lifelong learning. This is a unique part of the CQF program. Even if many pass out, students complain about the excessive fees, but very few programs offer lifelong learning opportunities without paying any extra cost.

As per the CQF website, there are around two core CQF lectures a week, which run from 6.00 pm – 8.30 pm (GMT). All training is delivered live via a webcast and is also recorded and made available on the CQF Portal within 24 hours.

CQF Program Fees

The main issue with students about the CQF program is its fees. According to many students who have passed out, fees seem to be the only drawback of the course. Per their opinion, it seems overpriced compared to the values CQF offers. Let’s analyze these passed-out students’ opinions and see whether they are overpriced.

Let’s have a look at the fees first.

CQF fees include the following things –

  • Pre-course preparationTuitionCourse ModulesExaminationLifelong learningCQF AppCQF Alumni Network AccessCourse Reading Material

The CFQ fees are as follows –

The CFQ fees mentioned below are applicable for January 2018 program.

*Note: EMEA = Europe, Middle East & Africa & APAC = Asia Pacific

**Note: The scholarship fees are applicable for delegates residing and working in India and include the Indian Resident Scholarship

(Information source: https://www.cqf.com/about-cqf/financing-cqf/fees )

All CFA Charterholders can get access to a 10% discount towards CQF fees as a result of the strong working relationship between Fitch Learning and the CFA Institute.

To see the value in the course and then decide whether this is the right course for you. From the above information, it’s clear that CQF has been providing a lot of value, and thus, the fees they are charging are not whopping, as mentioned by a few passed-out students. But the opinions are subjective and depend completely upon the students and their viewpoints.

CFQ Exam Subjects 

To complete the CQF program, you must study a total of 6 subjects. Before pursuing the full program, you would be able to get an opportunity to get a primer course, which is optional.

In the following section, we will discuss how the program is being modeled.

For now, let’s look at the details of the six subjects. Each subject will consist of lectures and discussions.

Subject #1 – Building Blocks of Quantitative Finance

  • Random Behavior of AssetsImportant Mathematical Tools and ResultsTaylor SeriesCentral Limit TheoremCentral Limit TheoremThe central limit theorem is a sampling distribution theory. It states that normal distribution can be attained by increasing sample size.read morePartial Differential EquationsTransition Density FunctionsFokker-Planck and KolmogorovStochastic Calculus and Itô’s LemmaManipulating Stochastic Differential EquationsProducts and StrategiesDiscrete MartingalesContinuous MartingalesThe Binomial Model for Asset Prices

Subject #2 – Quantitative Risk & Returns

  • Modern Portfolio TheoryModern Portfolio TheoryAn investment model like modern portfolio theory or MPT allows investors to choose from a variety of investment options comprising of a single portfolio for earning maximum benefits and that too at a market risk which is way lower than the various underlying investments or assets.read moreCapital Asset Pricing ModelCapital Asset Pricing ModelThe Capital Asset Pricing Model (CAPM) defines the expected return from a portfolio of various securities with varying degrees of risk. It also considers the volatility of a particular security in relation to the market.read moreSharpe RatioSharpe RatioSharpe Ratio, also known as Sharpe Measure, is a financial metric used to describe the investors’ excess return for the additional volatility experienced to hold a risky asset. You can calculate it by,
  • Sharpe Ratio = {(Average Investment Rate of Return – Risk-Free Rate)/Standard Deviation of Investment Return}
  • read more and Market Price of RiskArbitrage Pricing TheoryArbitrage Pricing TheoryThe arbitrage pricing theory (APT)is an economic model for estimating an asset’s price using the linear function between expected return and other macroeconomic factors associated with its risks. It offers a more efficient alternative to the traditional Capital Asset Pricing Model (CAPM)read morePortfolio OptimizationPortfolio OptimizationPortfolio optimization refers to the strategic process of making improvements or positive changes to the investor’s portfolio containing various assets. The Sharpe ratio helps to analyze the returns from an optimal portfolio.read more for Portfolio SelectionThe Black-Litterman ModelRisk Regulation and Basel IIIMarket Risk Measurement MethodsImpact of Risk Regulation on Investment and TradingVolatility Clustering & Other Stylized FactsProperties of Daily and High-Frequency Asset ReturnsVolatility Models: the ARCH Framework

Subject #3 – Equities & Currencies

  • The Black-Scholes ModelHedgingHedgingHedging is a type of investment that works like insurance and protects you from any financial losses. Hedging is achieved by taking the opposing position in the market.read more and the GreeksOption Trading StrategiesOption Trading StrategiesOptions trading refers to a contract between the buyer and the seller, where the option holder bets on the future price of an underlying security or index.read moreEarly Exercise and American OptionsAmerican OptionsAn American option is a type of options contract (call or put) that can be exercised at any time at the holder’s will of the opportunity before the expiration date. It allows the option holder to reap benefits from the security or stock at any time when the safety or supply is favorable. A European option is the exact opposite of an American option wherein the option holder cannot sell the option until the day of expiration, even when it is favorable. In addition, there is no geographical connection concerning the names since it only refers to the execution of the options trade.read moreFinite-Difference MethodsMonte Carlo SimulationsMonte Carlo SimulationsMonte Carlo Simulation is a mathematical method for calculating the odds of multiple possible outcomes occurring in an uncertain process through repeated random sampling. This computational algorithm makes assessing risks associated with a particular process convenient, thereby enabling better decision-making.read moreExotic OptionsExotic OptionsExotic options, as the name suggests, are more complex variations of the simple vanilla options, in terms of trigger points, payoff determination, expiry, underlying assets and other such features. They are designed to suit to the needs of the partaking investors and therefore sell through the Over-the-Counter (OTC) market.read moreVolatility Arbitrage StrategiesMartingale Theory for PricingGirsanov’s TheoremAdvanced GreeksDerivatives Market PracticeAdvanced Volatility Modeling in Complete MarketsNon-probabilistic Volatility ModelsMarket-based Valuation of Equity Index OptionsIndex OptionsIndex option refers to a financial derivative instrument that tracks the performance of an underlying index like DJX. The holder of this instrument bears the to exchange it for a predetermined exercise price at a future date but isn’t obliged to do so.read more Using Python

Subject #4 – Fixed Income & Commodities

  • Fixed-Income Products and Market PracticesYield, Duration, and ConvexityYield, Duration, And ConvexityConvexity of a bond is a measure that shows the relationship between bond price and yield, and it helps risk management tools to measure and manage a portfolio’s exposure to interest rate risk and loss of expectation.read moreOIS DiscountingStochastic Spot-Rate ModelsAffine Stochastic ModelsProbabilistic Methods for Interest RatesChange of NuméraireHeath, Jarrow, and MortonCalibrationData AnalysisLabor Market ModelSABR ModelMonte Carlo Methods, Brownian Bridge, Advances SchemesQuasi-Monte Carlo Methods, Sobol, and moreMathematica for Quantitative FinanceEnergy Derivatives: Speculation and Risk Management

Subject #5 – Credit Products & Risk

  • Structural ModelsReduced-Form Model and the Hazard RateCredit Risk and Credit DerivativesCredit DerivativesCredit derivatives (CDs) are derivative contracts that enable a lender to transfer a debt instrument’s credit risk to a third party in exchange for a payment. read moreX-Valuation Adjustment (CVA, DVA, FVA, MVA)CDS Pricing, Market ApproachSynthetic CDO PricingRisk of DefaultRisk Of DefaultDefault risk is a form of risk that measures the likelihood of not fulfilling obligations, such as principal or interest repayment, and is determined mathematically based on prior commitments, financial conditions, market conditions, liquidity position, and current obligations, among other factors.read more, Structural and Reduced FormImplementation of Copula ModelsStatistical Methods for Estimating Default ProbabilityCorrelation Sensitivity and State DependenceCo-integration: Modeling Long-Term Relationships Finance

Subject #6 – Advanced Electives

You choose two of the following online electives for specialization in your area. In addition, you are required to complete practical projects related to one elective.

  • Algorithmic TradingAlgorithmic TradingAlgorithmic trading is an automated buying and selling process with a programmed algorithm to determine the price, volume and timing of order. Algo-trading is a high-frequency trading technology that enables the exchange of stocks and other assets in the financial market.read moreAdvanced Computational MethodsAdvanced Risk ManagementAdvanced Volatility ModelingAdvanced Portfolio ManagementCounterparty Credit Risk ModelingBehavioural Finance for QuantsData Analytics with PythonPython Applications

All the above course details have been taken from the CFQ website.

From the above description, you’re clear that CQF is quite a comprehensive course, and you need to put in a lot of time and effort to make your mark.

How Should You Prepare for The CQF Program?

If you are thinking of pursuing CQF, then the next starting date is 24th January 2017. There will be another session in June 2017.

If you would like to prepare for the CQF exam, here’s a small guide to help you tread the path well –

  • First steps: If you are not familiar with the CQF program’s subject materials, it’s always advised that you take the primer course well. Here are the things you will learn in primer courses.Mathematics Primer: In this course, you will get 12 hours of intensive training, covering all the foundation-level knowledge needed for in-depth mathematics. In this primer, you will learn calculus, differential equations, linear algebra, probability, and statistics.Introduction to Python Primer: This primer consists of 8 hours of intensive training. You will learn a lot from this primer. For example, you will learn Python syntax, mathematical applications of Python & good programming practices in detail.Finance Primer: This primer is designed in such a way that it applies to both working professionals and newbies. It’s a 10-hour intensive course, and you will learn a ton from this primer. So, if you’re a newbie, you shouldn’t skip it. You will learn the following – Macro EconomicsMacro EconomicsMacroeconomics aims at studying aspects and phenomena important to the national economy and world economy at large like GDP, inflation, fiscal policies, monetary policies, unemployment rates.read moreCapital Markets in FundamentalsIntroduction to Money MarketsMoney MarketsThe money market is a financial market wherein short-term assets and open-ended funds are traded between institutions and traders.read moreTime Value of MoneyTime Value Of MoneyThe Time Value of Money (TVM) principle states that money received in the present is of higher worth than money received in the future because money received now can be invested and used to generate cash flows to the enterprise in the future in the form of interest or from future investment appreciation and reinvestment.read moreIntroduction to EquitiesIntroduction to BondsIntroduction to SwapsIntroduction To SwapsSwaps in finance involve a contract between two or more parties that involves exchanging cash flows based on a predetermined notional principal amount, including interest rate swaps, the exchange of floating rate interest with a fixed rate of interest.read moreIntroduction to FXIntroduction to DerivativesIntroduction to Commodities Visual Basics for Application: The primer will start with foundation knowledge of VBA and then go into complex VBA features.Don’t skip the primers: Many experienced professionals skip the primers. If you have a strong reason to do so, do it. But it’s always good to go through these primers as these act as refreshers and can give you a quick preparation tool for getting into the main curriculum.Schedule your study hours prior: According to many students, this course is too comprehensive for six months. So if you don’t schedule your study hours beforehand, it will be difficult for you to complete them. And remember that you need to score at least 60% to clear the exam. So prepare accordingly.Don’t take the projects lightly: According to many students, the projects in CQF are usually easier. But make sure that you don’t take them lightly because without doing the projects properly, your learning will not be complete, and you won’t be able to use the experience of the project in real life.

Why Should You Go for This CQF Exam?

There are many reasons why you should go for CQF. But note that you should not compare your perspective with any others because everyone’s perspective and career goals differ in scope, objective, and length. Here are the top reasons for which you should go for this course –

  • Macro EconomicsMacro EconomicsMacroeconomics aims at studying aspects and phenomena important to the national economy and world economy at large like GDP, inflation, fiscal policies, monetary policies, unemployment rates.read moreCapital Markets in FundamentalsIntroduction to Money MarketsMoney MarketsThe money market is a financial market wherein short-term assets and open-ended funds are traded between institutions and traders.read moreTime Value of MoneyTime Value Of MoneyThe Time Value of Money (TVM) principle states that money received in the present is of higher worth than money received in the future because money received now can be invested and used to generate cash flows to the enterprise in the future in the form of interest or from future investment appreciation and reinvestment.read moreIntroduction to EquitiesIntroduction to BondsIntroduction to SwapsIntroduction To SwapsSwaps in finance involve a contract between two or more parties that involves exchanging cash flows based on a predetermined notional principal amount, including interest rate swaps, the exchange of floating rate interest with a fixed rate of interest.read moreIntroduction to FXIntroduction to DerivativesIntroduction to Commodities

  • Flexibility: CQF is one of those courses which were designed to offer flexibility to its students. If you are working, you can easily pull through this course. It’s of only six months duration, and you can split it into two levels to avail more convenience. If you’re working professionally and want to get ahead in the curve, CQF would be the right bet for you.Broaden your skill-base: Of course, you need to have a background in mathematics or economics to appreciate the course’s value. But if you want to broaden your understanding of the market and get ahead as an investment advisor or in any related role, then CQF would add tremendous value to your existing skill sets.The application process is super easy: People who are interested in the program should be judged whether they are eligible for the program or not. But that doesn’t mean people need to go through a mountain to find a cave. Thus, it makes sense that the admission process in CQF is very straightforward. You need to do anything extraordinary to get admission. You need to send your updated resume, a math test will be conducted, and if everything goes well, you will be enrolled in the program right away.Accessibility of the faculty and staff: Many programs offer quality courses; however, the accessibility of the faculty and staff becomes the bottleneck in attracting more people to the programs. In the CQF course, you can easily access the faculty and staff, who are punctual and helpful in solving your issues with immediate attention.Importance of the self-study: The CQF program is primarily based on self-study. If you like your results to improve or learn something significant, your primary focus should be on self-study. In this course, a math primer course is offered, which is a refresher course, and if you don’t do self-study, it would be difficult for you to get ahead.Pragmatic nature of the course: This course is very much practical in nature. To a mathematical student, understanding the capital marketUnderstanding The Capital MarketA capital market is a place where buyers and sellers interact and trade financial securities such as debentures, stocks, debt instruments, bonds, and derivative instruments such as futures, options, swaps, and exchange-traded funds (ETFs). There are two kinds of markets: primary markets and secondary markets.read more may seem difficult. Still, without understanding both the subjects well, it would be impossible to find the sweet spot and apply the same in his professional field. Thus the course is very practical and considers the student’s needs more than anything else.

Pros and Cons of The CQF Program

In this section, let’s investigate which are the strong and which are the weak points of the course.

Pros of CQF Exam

  • The course is very comprehensive. And once you complete this course, your knowledge and skill sets will help you get ahead of the crowd.CQF is very flexible, and as it’s a distance learning course, you can do it while working in an organization.The time duration of the course is pretty good. CQF will take only six months to complete. Moreover, you can split the course into two levels.The practicality of the course is very appreciable, and it also provides a primers (optional) course and a lifelong course along with the main curriculum.

Cons of CQF Exam

  • The course fees are being criticized heavily, according to the students who have been doing the course or have passed out mentioned that the fees are too much in proportion to the value it provides.Often the pressure of the curriculum is too much for a six months duration. Many students feel that if the duration is one year, they will take more time studying.This course doesn’t emphasize statistics much. Many students feel that Statistics should be part of the curriculum.

Is CQF Certification Right for You to Become Employable?

To mention employability depends completely on the individual. If you want to make your mark professionally, you should take proper measures toward your end goal. But this course won’t provide you with career services to further your career aspirations.

Many students mentioned that if you want to get ahead in the professional field, then you should go for MFE (Masters of Financial Engineering) courses instead of CQF. However, if you are new to the field, you should do CQF first, and then if you want, you can go for MFE. CQF can act as a proper beginner course for MFE aspirants.

So the question remains whether you should do this course. The answer is both yes and no. Everyone is different, and everyone has their way of deciding on the course. But if you talk about the merit of the course, it’s quite good and a complete value for the money. Over 3500 students who have passed out from CQF at Fitch Learning can’t be wrong.