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Finance Requirements

I. Preparation in Quantitative Methods

The study of financial economics requires a grasp of several types of basic mathematics. Students must enter with or very quickly acquire knowledge of the concepts and techniques of:

Topic Courses
Calculus MATH 41 & 42: Calculus (accelerated)
Linear Algebra MATH 51: Linear Algebra and Differential Calculus of Several Variables
MATH 113: Linear Algebra and Matrix Theory
Statistics/Probability STATS 200: Introduction to Statistical Inference
STATS 116: Theory of Probability

It is strongly advised that students without a strong and recent background in calculus, linear algebra, or statistics come to Stanford in June to take courses to strengthen any weak areas.

Computer programming skills are necessary in coursework (as early as the first quarter of the first year) and in research. If students do not have adequate computer programming skills, they may wish to take a computer programming course before they arrive at Stanford, or take an appropriate Stanford computer science course while here.

II. General Program Requirement (GPR)

All students are encouraged to fulfill the general program requirement during their first year of study. Each course must be passed with a grade of P or B- or better. Interpretation of the LP grade will be determined on a case-by-case basis.

Any changes to the GPR or Field Course Requirement (FCR) will be “grandfathered.” Students are responsible for fulfilling the requirements in place at the time they entered the program.

In rare cases, the director of the PhD Program may waive a general program requirement for a student based on similar PhD-level coursework completed elsewhere. Substitutions as shown below can be arranged through the doctoral liaison, in some cases, for students with prior background in the indicated topic.

Students must take three GPR courses, one course in each of the following three topics: microeconomic analysis, econometrics, and organizations/psychology.

Topic Courses Possible Substitutes
Economics MGTECON 600: Microeconomic Analysis I MGTECON 601: Microeconomic Analysis II
ECON 202N: Core Economics: Modules 1 and 2 For Non-Economics PhD Students
ECON 203N: Core Economics: Modules 5 and 6 For Non-Economics PhD Students
Econometrics MGTECON 603: Econometric Methods I or
STATS 310: Theory of Probability
MGTECON 604: Econometric Methods II
MGTECON 605: Econometric Methods III
ECON 270: Intermediate Econometrics I
ECON 271: Intermediate Econometrics II
ECON 272: Intermediate Econometrics III
Organizations/Psychology GSBGEN 646: Behavioral Decision Making or
OB 671: Social Psychology of Organizations or
OB 672: Organizations and Environment or
OB 676: Social and Political Processes in Organizations or
OB 686: Behavioral Organization Theory or
PSYCH 212: Social Psychology or
PSYCH 256: Decisions and Judgment or
SOC 360: Introduction to Organizational Sociology
 

Every student, beginning in year one, will sign up for the required GSBGEN 699: Practicum in Research course for one unit. In terms during which students are doing a teaching practicum, they would sign up for GSBGEN 698: Practicum in Teaching.

Courses
GSB 699: Practicum in Research or
GSB 698: Practicum in Teaching

III. Field Course Requirement (FCR)

Each course must be passed with a grade of P or B- or better. Interpretation of the LP grade will be determined on a case by case basis. In some situations one or more of these required courses may not be offered. If any one of these required courses is not offered in each of the first three years a student is in residence, then the requirement to take the course will be waived for the student.

Courses
MGTECON 604: Econometric Methods II
FINANCE 620: Financial Markets I
FINANCE 621: Financial Markets II
FINANCE 624: Corporate Finance Theory
FINANCE 625: Empirical Asset Pricing
FINANCE 630: Empirical Corporate Finance

Students are expected to regularly attend Finance 628: Finance Pre-Seminar Reading Course throughout years one through three.

IV. Elective Courses

Usually, an individual will specialize in theoretical or empirical research. Students are encouraged to select their electives so as to maximize their skills in one of these two types of research but to have sufficient breadth in the other.

The following is a categorization of some useful electives for financial economists. Students typically take a total of about 8 to 10 elective courses from the lists below:

Topic Courses
Theoretical Research

ACCT 610: Seminar in Accounting Research
ECON 280: Welfare Economics
ECON281: Economics of Uncertainty
ECON 282: Theory of Information and Organization
ECON 287: General Equilibrium Theory
EES 253: Optimal Dynamic Systems
MATH 116: Complex Analysis
MATH 131: Partial Differential Equations I
MATH 171: Fundamental Concepts of Analysis
MATH 205A: Theory of Functions of a Real Variable
STATS 217 & 218: Introduction to Stochastic Processes
STATS 310A,B,C: Theory of Probability
STATS 317 & 318: Stochastic Processes

Empirical Research ACCT 612: Seminar in Accounting Research
MGTECON 604: Econometric Methods II
MGTECON 609: Seminar in the Application of Economic Theory to Econometrics
MGTECON 611: Experimental Methods in Economics
GSBGEN 640: Multivariate Analysis
ECON 270: Econometrics I
ECON 271: Econometrics II
ECON 272: Econometrics III
STATS 217 & 218: Introduction to Stochastic Processes
STATS 200: Statistical Inference
STATS 310A,B,C: Theory of Probability
International Finance/Monetary Theory FINANCE 323: International Financial Management
FINANCE 333: International Financial Markets
FINANCE 334: Global Financial Risk Management
ECON 211: Theory of Income and Economic Fluctuations I
ECON 230: Monetary Theory
ECON 265: International Finance
ECON 266: International Trade Theory and Development
MBA-Level Courses on Financial Theory

FINANCE 320: Fixed Income Securities: Instruments and Management
FINANCE 321: Investment Management and Entrepreneurial Finance
FINANCE 322: Management of Financial Institutions
FINANCE 324: Practical Corporate Finance
FINANCE 329: Investment Seminar: Seminars on various topics including pension funds, economics and regulations of financial institutions, mutual funds, gambling, corporate finance, applied financial theory, and advanced investment management
FINANCE 331: Corporate Financial Risk Management

Other Useful Electives for Financial Economists ACCT 612: Financial Reporting Seminar
MGTECON 602: Auctions, Bargaining, and Pricing
ECON 203: Price and Allocation Theory II
ECON 210: Theory of Income and Economic Fluctuations I (Macroeconomics)

There are many other courses taken by PhD students that are offered in departments outside Stanford GSB, such as Computer Science, Economics, Management Science and Engineering, Mathematics, Political Science, Psychology, Sociology, and StatisticsFind descriptions of these course offerings at Stanford’s Explore Courses site.

V. Field Examination

The field examination is given at the end of the summer after the first year. The examination tests a student’s understanding of coursework and the student’s ability to apply knowledge, intuition, and technical skills to problems in financial economics, some of which the student may not have encountered in coursework.

VI. Summer Research Paper Requirement

After completing two years of coursework, each student is required to write an original research paper each summer thereafter while in residence at GSB. These papers, which are also presented orally to the Finance faculty, provide the basis for discussions in student workshops. The paper done at the end of the second year is required for admission to candidacy for the doctoral degree. It is due and presented in the fall quarter of the third year.

VII. Dissertation Proposal

The dissertation proposal is designed to provide direct and timely faculty interaction with doctoral students planning their dissertation research. By the start of the spring quarter of the third year, or later if an exception is expressly granted by faculty, the student shall submit a written dissertation proposal to the finance faculty.

The following statement shall appear on the cover page of the proposal, signed by two finance faculty members: “I have read this document and find that it is satisfactory as a proposal for doctoral dissertation research.”

Students should consult the faculty on the length of the proposal. Typically, a 10-page proposal is appropriate.

VIII. Admission to Candidacy

Students who have completed the general program requirement, the major field requirement, the field examination, and research papers are considered for admission to candidacy for the doctoral degree.

IX. Dissertation Research

Students are expected to complete their Oral Examination by the end of the fourth year in the program.

Dissertation research is conducted under the supervision of the Finance faculty and very frequently under the joint supervision of Finance faculty and faculty from Operations, Information and Technology, Accounting, and Economic Analysis and Policy. On occasion, a supervisor from the Department of Economics has been chosen, depending on the research topic.

It is usually very advantageous to choose as a dissertation topic a subject in which at least one member of the Stanford GSB finance faculty has an active interest.