Essay 1：

What are your reasons for undertaking graduate study in the field of computational finance? Please describe how your future career plans relate to your experience, your education and your proposed training at Carnegie Mellon University. Describe your short-term and long-term objectives and how you plan to achieve them.

Financial Engineering is an academic discipline that draws on financial theory, the methodologies of engineering, the instruments from mathematics and the skills in computer programming to address the complicated challenges of the rapidly changing financial market. Financial engineering stand behind all the innovative financial products like options, futures and other derivatives and we know that innovation is always the fundamental driving force behind all cutting-edge developments.

However, somebody might raise objections to financial engineering, on the grounds that, sub-prime loans and mortgages, as well CDS (credit default swap), used to be some of the most prevalent products of financial engineering. It is precisely those financial innovations that triggered the on-going global financial crisis. However, I would argue that financial innovations have always been accompanied by risks and being risky is a necessary condition of the capital market. What went wrong was not financial engineering itself but the risk control mechanisms. The financial crisis is more human than technical and the role played by various financial derivatives to respond to the impulses of private, corporate and even state investors remains unchanged. Financial engineering is and will remain indispensible to our world.

Applying for graduate study in computational finance is a natural outcome of my past education and my future aspirations. As a student of computer science, I believe computer science is most powerful only when it becomes interdisciplinary, integrated with an intellectual enterprise other than itself. As a matter of fact, as my CV indicates, I have already been practicing financial engineering by launching Glass Capital Research Inc. as partner, a firm dedicated to developing financial solutions, especially risk management tools and trading models. To enter your program is really to acquire specialized and rigorous training in various domains of financial engineering so as to gain comprehensive understanding and skills of financial engineering as a systematic academic discipline. Upon earning your degree, I will possess professional knowledge and skills to enhance my entrepreneurship and expand the firm’s services and products.

Having a firm which is already engaged in computational finance is the greatest asset I have in applying for your program. We have been developing licensed risk management tools to hedge funds and individual asset managers and automatic trading models, for which we have obtained our own intellectual property rights. Indeed, one of the primary aims of the firm is to be committed to improving our R & D standards and the capacity for innovation. As far as my education is concerned, I am currently attending an Honors Program at the Department of Computer Science at State University of New York at Stony Brook. My proficiency in computer programming has provided me with a perfect platform to lead teams to realize our envisioned objectives of our products via computer technology. My study at CMU will effect a general improvement in my knowledge and skills of financial engineering, particularly in mathematics and statistics. In this way, by the time I return to my firm, I will be able to play an even more significant role in leadership and product development. I will contribute to CMU’s Master’s Program in Computational Finance by bringing my firm’s business operations to the classroom environment for case analysis, to learn how my prospective teachers and classmates comment on our organizational pattern, product line, workflow, and quality control so that we can make more substantial progress in the future.

My short-term objective is to improve my academic knowledge, enhance my understanding of the rapidly changing financial market, keep myself abreast with the latest developments, and explore for new patterns of product development. With the accumulation of practical experiences and improved skills, I hope to develop new products for the firm and create new values. I will continue to expand the firm and turn it into a highly specialized one in a particular domain of financial engineering products and services. Ultimately, I hope to establish my own hedge fund and fulfill my more ambitious entrepreneurship objectives. To do this, I will gain a truly in-depth knowledge about the industry, establish a broad network of connections with industry leaders and practitioners, including making use of the alumni network at CMU, and develop products and services that fully cater to the needs of different investors. I will work together with outstanding partners and consistently promote our organizational growth while paying special attention to risk control. In this way, the organization will develop in a healthy manner until it becomes an influential one.