Suggestions for topics for master thesis
Hello!
I have one year left of a Master of Finance degree. Over the last two quarters (January-June) I have to write a thesis. I want to work in IB after i graduate so I want to find an IB-related topic. Valuing a company is considered a "standard" topic on my school, and it is often easier to get better grades with more "innovative" topics. Does anyone have any suggestions for a topic that is "innovative" and also prepares me for an investment banking job?
Thank you!
EDITED to give OP an IBD project for a Master's student.
How comfortable are you with linear programs, stats, and stochastic optimization?
Maybe you take a look at resource companies. One anomaly with gold miners is that they mine their most costly gold during periods of high prices and mine their least costly gold during periods of low prices.
Assume gold is a stochastic process that has drift of inflation and standard deviation of returns equal to its historical average.
Take a look at a specific miner's mining opportunities and:
1.) Figure out why it wants to mine the most expensive gold first rather than go for the least expensive gold. This is where the stochastic program/optimization comes in. You could also do it discretely and just use a markov decision process and work your way backwards. But there will be some coding.
2.) Is this efficient management or is this a conflict of interest? Are mining companies operating in the best interests of shareholders by preserving their options to mine later? Or should they be exercising the cheaper effective calls from the less expensive mines today? What are the decisions coming out of the optimization recommending?
3.) If it's efficient management, figure out a product to sell that takes advantage of the optionality of this gold mining.
4.) If it's a conflict of interest, focus on which companies are being poorly run based on the model developed and the potential value of a takeover.
You still get the valuation perspective from this, but now you have just developed a really innovative tool and explained an interesting phenomenon in business. Someone may have already looked at this and published it, but otherwise this could also be publishable. Not a top three journal but maybe a 2nd tier? Either way, it's going to make the professor reviewing it think long and hard.
If you can get this published in a 2nd tier journal, you've pretty much got a call option on a top 20 finance or econ PhD if you hate IBD.
I know this stuff may sound really complicated, but all you're doing is modeling gold prices on a normal distribution and treating a series of mines like options in a binary pricing tree. And you may be creating a new way to value gold companies.
Maybe someone has already done this. And I think most analysts are aware that on some level gold mines are options. But I don't think the ER mining groups are running stochastic models to do their valuations, and it's possible the "mine your most expensive gold first" phenomenon is still an unanswered question that a stochastic model could help explain.
^^this is gold (no pun intended)
I would also point out that there may be some phenomenon explaining this that the simple model I outlined may not explain. You may find something very counter-intuitive. There may be startup or shutdown costs. The price of gold may not follow a normal distribution and/or you may be dealing with a markov-switching volatility model with periods of high and low volatility. It may just be that management is running the company in their own best interests (self-preservation). You'll probably see this as a wrench in your research project at first, but it may be an opportunity to prove something interesting about how mining companies (or even businesses in general) operate. Depending on how much data the explanation requires, you can start taking a look at other companies, see if they have the same problem or not, and ultimately try to develop some sort of strong t-stat proving the correlation between the deviation you observe and some sort of underlying condition/explanation about the company.
So I would try to find any sort of literature or information I could on this market behavior, take a look at a firm that publishes a lot of information on mining costs and which mines are operating, and see how "rationally" they are operating relative to the suggestions of the stochastic program.
Also, I know this post isn't on Arxiv, but it's timestamped on WallStreetOasis, so it's going to be embarrassing to claim sole credit in a major journal. If this brilliant idea gets published in a top three journal, I request a piglet, boar, or other porcine creature to be shipped to me via air freight (cannot be ground- MUST BE FLOWN) and a footnote acknowledgement for "IlliniProgrammer" in the publication.
I do think you'll find something interesting (it may be a lot of work).
I'm willing to help a little with explaining how to set this up if OP knows how to code ok in a statically typed object oriented language (C++, Java, etc.) and can understand the basics of how gold prices move (the variance is proportional to time; the standard deviation is proportional to the square root of time).
You are probably going to have to optimize on a monte-carlo with millions of simulations to get a general strategy to converge, so you can't write shitty code for this. It doesn't have to be great, but you can't be doing O(n^2) stuff.
Hi, I'm currently looking for a interesting topic for my Master thesis, and when I was goggling around i stumble over this discussion. This is exactly what I want to do so I was just wondering if you are still as excited about the subject and if you know if someone already wrote about it?
Best regards, Gustaf
I apologize for the unprofessionally late reply (I've been on a roadtrip with restricted internet access). Wow, that was a great suggestion. Unfortunately I don't know enough about neither gold mining nor coding to write about this. Hopefully someone else can make use of your tips! Thank you IlliniProgrammer!
I'm also also in the exact same boat. Could of course do a (standard) valuation exercise about Company X, but that's as original as buying an iPhone.
Sometimes I think I am smart but then I read an IP post
Any idea for a Master Thesis subject ? (Originally Posted: 09/13/2013)
Hi everyone !
im taking a master's degree in Finance, Ive been working in an Asset Management company in Luxembourg in Risk / Compliance for a year, and my last intern will be with PwC in Lux too.
As soon as im graduated Id like to apply for jobs in risk in UK.
Do you have any suggestion for a topic for my master thesis ? It should be about 80 - 100 pages without appendixes. I take it seriously and Id like to put it on my resume, i think that a relevant subject could help for the future.
I thought of EMIR (new european regulation about OTC derivatives) ?
Thanks a lot !
Tweedi
the average price of a phallic
Risk hedging in commodities markets.
Interesting thesis topics (Originally Posted: 01/14/2011)
So I've got to write a senior economics thesis this semester and thought I'd put it to WSO to brainstorm some ideas.
One someone has already put out is exploring the relation between exchange rates and certain commodity prices (something like platinum that maybe hadn't been covered as much).
So, pretend you've got a research intern and tell me what you wanna know.
I'm currently researching the implied base correlations of the cdx index tranches during and post the financial crisis. Definitely do something fairly quantitative it helps a lot in interviews
Look up Darrell Duffie and his work on Dark Markets. Pretty interesting stuff. Maybe you can find some inspiration there.
Implementation of a negative income tax on total income tax revenues over the last 40 years as compared to the current system
Before I delve into Duffie, would that be the research on incomplete markets in equilibrium?
Ideas for thesis topic? (Originally Posted: 08/02/2014)
Hey guys,
I start my 20-week senior thesis in about a month or so. Do you guys have any ideas on topics that may be particularly interesting / will help educate me on relevant issues for IBs / will be good talking points in interviews?
Thanks
just dont write crap.
Quisquam sint tenetur non sed non soluta minus. Velit minima numquam et. Molestiae et voluptatum nesciunt voluptatem et.
Dolorum sint harum nulla porro doloribus et tempora nulla. Itaque ab magni voluptatum aut rem earum. Voluptatem beatae iure aut doloribus. Nihil ex illo quisquam nihil ex eaque. Recusandae atque eligendi veniam et qui officiis. Et sunt distinctio ipsum sunt.
Voluptatum repudiandae et vero consequuntur iusto tenetur. Cum non dolorem et neque neque non quo. Aut possimus cupiditate quae laudantium molestias. Nemo ipsam rerum labore reprehenderit soluta. Est est quia excepturi accusamus qui rerum aliquam distinctio. Autem neque et delectus magni sit sit. Sunt iusto nobis eaque sequi provident et earum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...