Certificate in Quantitative Finance (CQF) Exam Guide

Certificate in Quantitative Finance (CQF) Exam – If you have always dreamed of doing a financial engineering program, but don’t know where to look, Certificate in Quantitative Finance (CQF) program is for you. This is a part time financial engineering program which you can complete within 6 months. If you are planning to go in core domains like IT, insurance, risk management or quantitative trading, this is the right course for you.

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, fees of the program, subjects to be studied, how the course is being modeled, how should you prepare for CQF exam, 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 Certificate in Quantitative Finance (CQF)?

CQF is a part-time financial engineering program that is delivered and taken online. It is designed for in-depth training for professionals and students who want to make their career in derivatives, IT, quantitative trading, insurance, financial model validation or risk management.

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

Here’s the graphical representation of the same. From the below picture, you would get the idea how CQF course is being designed.

CQF Program Structure

source: CQF

It’s clear that CQF is designed not only by emphasizing on 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 CQF program, you can take the full course or split it in two levels. After the program, you will have the opportunity for lifelong learning. This is the most unique part of CQF program. Even if many passed out students complain about the excessive fees, but very few program offers lifelong learning opportunity without having to pay any extra cost. That way, you will be in constant touch of the subject matter and gradually will be able to update your knowledge base and apply the same in your respective professional field.

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

CQF Program Fees

The main issue with students about CQF program is its fees. According to many students who have passed out, fees seem to be the only drawback of the course. As per their opinion, it seems over-priced in proportion to the values CQF offers. Let’s analyse the opinion of these passed out students and let’s see whether it is really over-priced or not.

Let’s have a look at the fees first.

CQF fees include the following things –

  • Pre-course preparation
  • Tuition
  • Course Modules
  • Examination
  • Lifelong learning
  • CQF App
  • CQF Alumni Network Access
  • Course Reading Material

The CFQ fees are as follows –

The CFQ fees mentioned below are applicable for January 2017 program.

EMEA & APAC fees* By 5th October By 12th December After 12th December
Level 1 US $8600 US $9000 US $9266
Level 2 US $8600 US $9000 US $9266
Full Program (Level 1+2) US $15,932 US $16,600 US $17,265

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

Scholarship fees** By 5th October By 12th December After 12th December
Level 1 US $3440 US $3600 US $3706
Level 2 US $3440 US $3600 US $3706
Full Program (Level 1+2) US $6373 US $6640 US $6906

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

(Information source: http://www.cqf.com/admissions/fees-details )

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.

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 few passed out students. But the opinions are subjective and depend completely upon the students and their viewpoints. So see the value in the course and then decide whether this is the right course for you.

CFQ Exam Subjects 

To complete the CQF program, you need to study total 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 talk about how the program is being modeled.

For now, let’s have a 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 Assets
  • Important Mathematical Tools and Results
  • Taylor Series
  • Central Limit Theorem
  • Partial Differential Equations
  • Transition Density Functions
  • Fokker-Planck and Kolmogorov
  • Stochastic Calculus and Itô’s Lemma
  • Manipulating Stochastic Differential Equations
  • Products and Strategies
  • Discrete Martingales
  • Continuous Martingales
  • The Binomial Model for Asset Prices

Subject 2 – Quantitative Risk & Returns

  • Modern Portfolio Theory
  • Capital Asset Pricing Model
  • Sharpe Ratio and Market Price of Risk
  • Arbitrage Pricing Theory
  • Portfolio Optimization for Portfolio Selection
  • The Black-Litterman Model
  • Risk Regulation and Basel III
  • Market Risk Measurement Methods
  • Impact of Risk Regulation on Investment and Trading
  • Volatility Clustering & Other Stylized Facts
  • Properties of Daily and High Frequency Asset Returns
  • Volatility Models: the ARCH Framework

Subject 3 – Equities & Currencies

  • The Black-Scholes Model
  • Hedging and the Greeks
  • Option Strategies
  • Early Exercise and American Options
  • Finite-Difference Methods
  • Monte Carlo Simulations
  • Exotic Options
  • Volatility Arbitrage Strategies
  • Martingale Theory for Pricing
  • Girsanov’s Theorem
  • Advanced Greeks
  • Derivatives Market Practice
  • Advanced Volatility Modeling in Complete Markets
  • Non-probabilistic Volatility Models
  • Market-based Valuation of Equity Index Options Using Python

Subject 4 – Fixed Income & Commodities

  • Fixed-Income Products and Market Practices
  • Yield, Duration and Convexity
  • OIS Discounting
  • Stochastic Spot-Rate Models
  • Affine Stochastic Models
  • Probabilistic Methods for Interest Rates
  • Change of Numéraire
  • Heath, Jarrow and Morton
  • Calibration
  • Data Analysis
  • Libor Market Model
  • SABR Model
  • Monte Carlo Methods, Brownian Bridge, Advances Schemes
  • Quasi-Monte Carlo Methods, Sobol and more
  • Mathematica for Quantitative Finance
  • Energy Derivatives: Speculation and Risk Management

Subject 5 – Credit Products & Risk

  • Structural Models
  • Reduced-Form Model and the Hazard Rate
  • Credit Risk and Credit Derivatives
  • X-Valuation Adjustment (CVA, DVA, FVA, MVA)
  • CDS Pricing, Market Approach
  • Synthetic CDO Pricing
  • Risk of Default, Structural and Reduced Form
  • Implementation of Copula Models
  • Statistical Methods for Estimating Default Probability
  • Correlation Sensitivity and State Dependence
  • Co-integration: Modeling Long-Term Relationships Finance

Subject 6 – Advanced Electives

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

  • Algorithmic Trading
  • Advanced Computational Methods
  • Advanced Risk Management
  • Advanced Volatility Modeling
  • Advanced Portfolio Management
  • Counterparty Credit Risk Modeling
  • Behavioural Finance for Quants
  • Data Analytics with Python
  • Python Applications

All the above course details have been taken from 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 be able to make your mark.

How should you prepare for CQF program?

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

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

  • First steps: If you are not much acquainted with the subject materials of CQF program, 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 which will cover 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’s applicable for both working professionals and newbie. 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 Economics
    • Capital Markets in Fundamentals
    • Introduction to Money Markets
    • Time Value of Money
    • Introduction to Equities
    • Introduction to Bonds
    • Introduction to Swaps
    • Introduction to FX
    • Introduction to Derivatives
    • Introduction to Commodities
  • Visual Basics for Application: The primer will start with foundation knowledge of VBA and then go in complex VBA features.
  • Don’t skip the primers: Many experienced professional skip the primers. If you have a strong reason to do so, do it. But it’s always good if you can 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 6 months duration. So if you don’t schedule your study hours beforehand, it would be difficult for you to complete it. 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 for which you should go for CQF. But note that you should not compare your perspective with any of 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 –

  • Flexibility: CQF is one of those courses which were designed in order to offer flexibility to its students. If you are working, you would be able to easily pull through this course. It’s of only 6 months duration and you can split into two levels to avail more convenience. If you’re working professional and want to get ahead in the curve, CQF would be the right bet for you.
  • Broaden you skill-base: Of course, you need to have a background in mathematics or economics to be able to appreciate the value of the course. But if you want to broaden your understanding about the market and get ahead as investment advisor or in any other related role, then CQF would add tremendous value to your existing skill sets.
  • 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 straight forward. You need to do anything extra-ordinary 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 for the program right away.
  • Accessibility of the faculty and staff: Many programs offer quality courses; however the accessibility of the faculty and staff become bottlenecks in attracting more people for the programs. In CQF course, you can easily access the faculty and staff and they’re very punctual and helpful in solving your issues with immediate attention.
  • Importance on 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 capital market may seem difficult; but 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 takes into account the need of the student 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 would successfully do this course, your knowledge and skillsets will help you get ahead of the crowd.
  • CQF is very flexible and as it’s 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 6 months to complete. Moreover, you can split the course in 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 fees of the course 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 6 months duration. Many students feel that if the duration is 1 year, then they would take more time to study.
  • This course doesn’t emphasize much on Statistics. Many students feel that Statistics should be part of the curriculum. 

Is CQF certification right for you to become employable?

To mention about employability, it depends completely on the individual. If you want to make your mark professionally, then you would take proper measures toward your end goal. But this course won’t provide you any career services for furthering 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, it’s advisable that you 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. Every individual is different and everyone has their own 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 money. Over 3500 students who have passed out from CQF at Fitch Learning can’t be wrong.

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