Certificate in Quantitative Finance (CQF) Exam Guide

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 careers in derivatives, IT, quantitative trading, 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.

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 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 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.

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 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 Trading 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
• Labor 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 of 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 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.

If you are thinking of pursuing CQF, then the next starting date is 24^th 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 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 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.

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 -

• 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 market 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.

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.

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.