In this episode of What’s New at CFI on FinPod, we discuss the newly refreshed course, “Math for Finance Professionals,” which covers essential concepts like simple and compound interest, discounted cash flows, and statistical measures using Excel. This course equips finance professionals with the foundational skills necessary for a variety of roles in finance  & banking.

Tune in to learn more about the new course and its benefits for finance professionals seeking careers in investment banking, capital markets, risk management, investment and wealth management, finance, and accounting.

Transcript

Jeff Schmidt (00:14)
Hello and welcome to the What’s New at CFI podcast. I’m Jeff Schmidt. I’m vice president of financial modeling at CFI and I’m joined by Ryan Spendelow, senior vice president of training and curriculum. How are you today?

Ryan (00:30)
Hey Jeff, I’m doing really, really well, thanks. How are you?

Jeff Schmidt (00:34)
I’m great. Absolutely great. Yep. Love to talk about our courses. So there’s a course, guess it’s technically a refresh course, Math for Finance Professionals. financial math, that’s a pretty broad topic. what…

Ryan (00:35)
Brilliant.

Got a good course to talk about too today.

Jeff Schmidt (00:59)
Are you covering in this course and what’s the underlying rationale behind creating this course and this refresh course?

Ryan (01:08)
Those are some really, really great questions, Jeff. So, what are we covering in this course? Well, we start the course by exploring the concepts of simple and compound interest. And even though simple interest isn’t used a lot in finance, it’s a really great place to start.

just thinking about things like present values, future values, the time value of money, but also opening up Excel and rolling up our sleeves and doing some calculations in Excel. We move very quickly to compounding interest, which is found much more widely across all areas of finance. Once we’ve introduced compound interest, we then use that knowledge to talk about discounted cash flows.

As someone that’s been one of the driving forces behind our FMVA program, you’ll appreciate as much as anybody how widely applied the DCF framework is across all areas of finance. So we look at discounted cash flows, we look at discounted cash flows over annual periods, over monthly periods, and we use that framework, and we apply that framework to a number of real-world finance scenarios.

So whether it be some loan examples, whether it be mortgage examples, whether it be looking at some net present value and IRR calculations, or we also actually spend some time pricing some simple bonds as well. So we look at some really wide-ranging applications of DCF, and again, we use Excel to solve these real-world problems.

And then, the final part of the course, the final chapter is we introduce some really important statistical concepts that people in various roles in finance will hopefully find really, really useful. we look at arithmetic versus geometric means. We look at the normal distribution and we use that normal distribution to calculate some probabilities and what have you. and really importantly, we look at standard deviations as well.

So, at a really high level, that’s the kind of stuff that we’re covering.

Jeff Schmidt (03:24)
Awesome, sounds chock full of information. So why is it important for finance professionals to have this foundation in the concepts in this course?

Ryan (03:41)
It’s a really great question. And it doesn’t really matter what role you find yourself in in finance or what role you aspire to be in finance.

Almost all roles will have some element of financial maths and depending on what role you’re looking at. You could need quite a deep knowledge and understanding of different financial maths concepts and techniques so financial math really provides both the tools and the techniques that finance professionals need to make informed decisions. so whether it be evaluating things like investment opportunities.

So valuing a company, example, or maybe investing in a stock or a bond. Whether it’s to use financial math to assess risks, so standard deviations or value at risk of various investments or opportunities in the capital markets. Determining the fair value of a company from a wealth management perspective, working out the risk of a portfolio from a commercial banking perspective, trying to price a mortgage. It’s just found across

all areas of finance regardless of the role. And so for our CFI learners, if you look at our different specializations and certifications, you’ll find that a certain level of financial maths will be really rare, in some instances, crucial, and in other instances, really beneficial to help them be successful in whatever course of study that they’ve chosen.

Jeff Schmidt (05:17)
I think that’s a really great point. This doesn’t just apply to one certification or specialization. It applies to basically everything that we have.

Ryan (05:28)
Yeah, that’s right. And that’s why if you’re an FMVA learner, if you’re a CMSA learner, or if you’re taking our wealth management certification, you’ll find that this course is one of the recommended prep courses because it’s such foundational knowledge. so particularly if you’re new to finance, maybe you’re coming from a different career that hasn’t…

relied on math so much or maybe it’s been a while since you’ve taken the math courses at school or at university or at college. This is a really, really highly recommended prep course for CFI learners.

Jeff Schmidt (06:03)
Are there any specific tools that you use in this course?

Ryan (06:10)
Again, Jeff, that’s another really, really great question. In this course, we rely a lot on Excel.

Excel is that kind of, regardless of what role you find yourself in as a finance professional, you’re probably going to find yourself spending a lot of time in Excel. So in all those chapters that we outlined at the start of this podcast, Simple Compound Interest, DCF, DCF Applications, Bond Pricing, and Statistical Measures for, that’s often used or found in finance, we use Excel in all of those chapters

solve problems, to calculate various fair values of financial instruments, to calculate probabilities, to find future and present values. And we’ll often make use of inbuilt Excel functions like PMT functions, FV, PV functions, normal distribution functions, but often also we’ll just use

actual math behind some of the frameworks that we’re looking at to calculate the answers in. And we’ll often sense check them against each other as well. So we might find the net present value of an investment by actually calculating discounted cash flows and finding their present values. Then we’ll sense check that across the NPV function. And why that’s really, really useful is

sometimes functions don’t quite work like you expect them to and the NPV is a really, really good example of that. And so doing it the long way, then comparing it to the actual function means that students get a really, really robust understanding of how functions work and the particular way that they work.

Jeff Schmidt (07:40)
Yes.

That’s a really great, really great point about the NPV function. There’s some limitations with it and I’m glad you mentioned that as a long time Excel user, the NPV has caused headaches. So, I definitely understand that. Anything else you’d like to talk about with this course?

Ryan (08:08)
Yeah, yeah, I can imagine.

Now, as I said, I just think it’s a really, really foundational course that you’ll find across a lot of our certifications and specializations. It might be that you have a really good understanding of financial math, but it still might be worth doing this prep course just to get the Excel practice as well before you dive into some of the core subjects or maybe the FMVA or CMSA, I beg your pardon. And it’s very, very practical.

One of the reasons why we’ve done the refresh is just to embed a few, just to make sure that all of our CFI courses we’re making it as practical, as hands-on, and as engaging as possible, really.

Jeff Schmidt (09:00)
Excellent, thank you for joining us for this podcast. So really looking forward to the course.

Ryan (09:09)
No worries at all, Jeff. I can’t wait for you to take it and give me some of your feedback.

Jeff Schmidt (09:13)
Absolutely.