Computational Finance is branch of Applied Computer Science that deals with problems of practical interest in Finance. It puts emphasis on practical numerical methods rather than mathematical proofs of Applied Science.
Focuses on techniques directly applied to economic analysis.
Its interdisciplinary between mathematical finance and numerical methods.
Two major areas :
- Efficient and Accurate computation of fair values of financial securities.
- Modeling of stochastic Time Series.
Financial Engineering involves :
- financial theory
- methods of engineering
- tools of maths
Financial engineer : develops and maintains models used for pricing of derivatives.