Financial Math with David FitzMaurice: Adding it Up

David FitzMaurice SunTrust   HIGH : 512k/second   LOW : 48k/second

What does he do?: Fitz works at SunTrust Bank where he uses math to solve financial problems.

What sorts of skills does Fitz use?: Mostly algebra, some calculus, and some geometry, in tandem with computer programming. Algebra is applied in situations where he has to solve for an unknown variable. "Calculus," he says, "is used to find the contribution of an element into a larger pool. If you have an equation for how a pool of bonds perform as a group, the introduction of a new bond may change the performance. The easiest way to understand that is to use calculus to take the differential of the variable, and then solve for the variable.

"Also," he writes, "calculus is used in trying to predict future interest rates. Normally, interest rates naturally form a curve. To project future rates, one needs to be able to find points along a curve--which again is calculus. Some geometry is in here too, to understand the shape of the curve--and whether your solution makes sense. Since there are a lot of curves in finance: interest rate curves, prepayment curves, default curves, etc, one needs a check and geometry is used as a quick check for a lot of these things. That's what I use it all for--and there are lots of other applications in finance."

What is his tie to Tech?: Fitz got his Masters degree from Georgia Tech's Quantitative and Computational Finance program.

Interesting fact about Fitz: He developed his interest in math after graduating from college. His main interests in high school were foreign languages and English.

So why did he study math later on?: Because at the banks where he worked the mathematicians had all the answers.

Is there a lot of money to be made in this line of work?: You betcha.

A good book he recommends: Liars Poker, by Michael Lewis. (Associated trivia: Michael Lewis is now married to former MTV news correspondent Tabitha Soren.)

The download speeds of the videos are 512k/second (recommended for higher speed connections—cable and DSL connections), and 48k/second (for lower speed connections—particularly modems).


Web Resources

Careers

Math: Top Jobs (High School)
http://www.ceismc.gatech.edu/busyt/career.shtml#Math

Mathematics: Careers that Rely on Math (High School)
http://www.ceismc.gatech.edu/busyt/career.shtml#Mathematics

Math Education

National Council on Economic Education: Lessons for Educators and Students (Elementary, Middle, and High School)
http://www.ceismc.gatech.edu/busyt/math_teachres.shtml#National

Math in Daily Life (Middle and High School)
http://www.ceismc.gatech.edu/busyt/math.shtml#Math