March 2008
Financial Education Partnership at Duke University
Summary
FEP Summary
The Financial Education Partnership (FEP) is a collaborative effort between
Professor Emma Rasiel and the Duke University Career Center, to enrich and
expand co-curricular and extra-curricular programs and education for students
interested in finance and the financial markets. The FEP utilizes a model of
corporate sponsorship by financial institutions, typically linking with prominent
Duke alumni in these companies, to expand opportunities for education and
interaction between Duke undergraduates and Wall Street. FEP Sponsors are
invited to participate in these activities in both formal and informal settings in
order to facilitate learning and increase communication between students and
the financial services industry.
FEP Initiatives
ƒ Educational Competitions & Activities
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2007 – 2008 Sponsors
Bank of America
Barclays Capital
Deutsche Bank
Goldman Sachs
Lehman Brothers
Merrill Lynch
Morgan Stanley
Distribution of the 250 Duke
students who participated in
one or more competitions &
activities…
Trading Game
Equity Research Competition
Corporate Valuation Competition
Wall Street Journal Quiz
Essay Competition
Intensive Corporate Valuation seminar
engineering
public policy
ƒ Mentoring Program
ƒ Minority Outreach
economics
polsci
other
ƒ Duke Career Center Connection
• Career Fair Registration
• Diversity Dinner Invitation
…by major
ƒ Visiting Lectures
ƒ Recruiting Strategy Consultations
Recruiting Statistics (as of March 31, 2008)
sophomores
juniors
ƒ As of March 2008, more than 90 Duke undergraduates have reported obtaining
summer internships in the financial markets.
• More than 70% of these internships are with Wall Street investment banks.
• This number is commensurate with Duke summer intern hiring statistics as of
2007.
…by class
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March 2008
Financial Education Partnership at Duke University
Sponsored Activities
Individual Sponsor Activities
The competitions in which I
participated have really given
me a better understanding of the
financial world…
`
The Financial Educational Partnership created and administered four stand-alone
educational competitions for Duke juniors and sophomores in Fall 2007 and one in
Spring 2008. Each competition was sponsored by an individual investment bank.
Each competition was widely advertised, and open to all Duke juniors and
sophomores, regardless of their academic major. Thus the FEP broadened the
opportunities for all Duke students to learn about many different aspects of the
financial markets in an extra-curricular setting.
Corporate Valuation Case Study Competition
Oct 2007
ƒ Undergraduates self-selected into three-student teams to produce a powerpoint
presentation evaluating the potential acquisition of radio stations in the Harvard
Business School case study “Radio One Inc.”
ƒ Ultimately 25 teams submitted presentations
ƒ The FEP Director selected the best twelve teams who:
• presented their results to a 5-member panel of bankers
• responded to the panel’s questions.
ƒ The panel selected the top three teams: the winning team was awarded a daylong visit to the sponsor, to include interviews for summer internships.
ƒ The day concluded with a reception for all 75 participating students as well as
visitors from the sponsor.
Equity Research & Analysis Competition
`
Thank you for giving us the
opportunity to be involved in
such a worthwhile exercise.
Having the ability to interact with
your students outside of an
"interview"
environment
is
extremely valuable for us as
well.
VP at Sponsor Bank
Nov 2007
ƒ Undergraduates were invited either to pair up or to work individually to create a
buy-side equity research report on one of a choice of five publicly traded
equities.
ƒ 35 teams submitted research reports, of which the FEP Director selected the
best twelve to present to the 6-person sponsor panel.
ƒ The Panel then identified the top three teams:
• The winning pair received automatic final round interviews for summer
internships at the sponsor.
• The 2nd and 3rd place teams won automatic first round interviews.
ƒ The day concluded with a reception for the sponsor’s visitors as well as all 60
students who submitted research reports.
The Trading Game
Duke Undergraduate
Thanks again for such a great
event.
We
keep
hearing
wonderful feedback from the
panelists about the quality of the
candidates and the high quality
of their presentations.
`
Recruiter at Sponsor Bank
Fall 2007
ƒ The Trading Game was created by FEP Director Emma Rasiel in 2004, and has
been sponsored for the last three years by the same investment bank.
ƒ More than 50 students participated actively in this competition, in which
competitors manage portfolios of global assets throughout the Fall semester, and
submit a written trading journal documenting their strategy.
ƒ Traders are evaluated on the basis of both absolute and risk-adjusted return.
ƒ Winners in each category are flown to New York to visit the sponsor’s trading
floors, and are interviewed for summer internships.
ƒ The game concluded at the beginning of December, with a reception for all of the
traders as well as visitors from the sponsoring bank.
ƒ In both 2006 & 2007, one of the two winning traders was subsequently offered a
summer internship at the sponsoring bank.
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March 2008
Financial Education Partnership at Duke University
Wall Street Journal Quiz Competition
Sponsored Activities
Oct – Nov 2007
I think [last night’s reception]
was one of the best I have ever
attended and I also think that the
students who attended were
extremely good candidates.
`
ƒ 50 undergraduates took an hour-long quiz created by the FEP, which contained
questions about financial/business news from stories in the WSJ over the
preceding six weeks.
ƒ The top three participants all received automatic final round interviews for
summer internships at the sponsoring bank.
ƒ The winning participant also won a trip to the sponsor’s trading floor in New York.
ƒ All quiz participants were invited to a reception after the quiz, also attended by a
number of executives from the sponsoring bank.
Essay Competition
MD at Sponsor Bank
Forthcoming: Spring 2008
Students will be invited to write a 4-6 page essay on one of several possible topics,
including:
ƒ The genesis and evolution of the current credit crisis
ƒ Incorporating equity volatility futures into a well-diversified portfolio
ƒ US equity markets—a performance forecast for 2008.
Training the Street Financial Valuation Seminar
Jan 2008
Approximately 50 students attended this four hour, intensive valuation seminar
provided by Training the Street (TTS), a New York financial training firm. This
seminar has been offered to Duke undergraduates every year since 2004, and the
same Investment Bank has sponsored this event annually since 2006.
Mentor Program
Spring 2008
The goal of the mentoring program is to give undergraduates the opportunity to
speak informally with Wall Street professionals, in order to learn more about
different areas of investment banking and to obtain help in preparing for the
summer intern recruiting process.
More than 100 students submitted resumes and letters of interest to request
participation in the mentoring program. Mentors were solicited from each of the
FEP sponsoring banks, and approximately 90 students were matched with
mentors.
Students were assigned to mentors based on the students’ expressed area of
interest in banking (e.g. corporate finance, sales and trading, research), rather
than on the basis of a student’s perceived suitability for their mentor’s bank.
My mentor was awesome on
general
career
advice—he
answered every question &
concern that I had, very
thoroughly.
`
`
It was a wonderful experience. My
mentor was extremely helpful in
all aspects—he critiqued my
resume, helped me through the
interview process, and finally
helped me make my decision. He
truly made the difference for me
getting an internship and not.
Ultimately, 94% of the students reported having successful and beneficial
mentoring experiences.
`
I have had a phenomenal time with
my mentor.
Duke undergraduates
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March 2008
Financial Education Partnership at Duke University
Sponsored Activities
Minority outreach program
One of the FEP’s stated goals is to increase opportunities for all undergraduates
to learn more about the financial markets, regardless of their gender, ethnic
group, and academic major.
Meanwhile Wall Street is eager to attract and recruit more minority candidates,
since African-Americans, Hispanics, and some other ethnic groups are
significantly under-represented among the New York investment banks.
Fall semester
Over the course of the Fall semester, the FEP invited African-American freshmen to
four evening events designed to introduce students of color to the idea of exploring
possible careers in finance, using panel discussions and interactive games. During
one of these events (in October), African Americans from some of the sponsoring
banks were part of the panel discussion.
I'm thoroughly impressed with the
program you've put together and
I've been telling everyone about
it! It would be amazing to see
something similar replicated on
other campuses because it's
definitely an essential and valueadd agenda.
VP from a Sponsor Bank who
attended the October event
In total 45 freshmen attended at least one of the three events (and 15 attended all
three). At the end of the semester, all of these students were invited to participate in
a reading/lunch group in the Spring.
Spring semester
The FEP hosts a reading/lunch group every second week for the minority freshmen
who expressed interest in participating. There are 12 students who regularly attend.
The reading list has included canonical texts about finance, such as “Random Walk
down Wall Street,” as well as humorous autobiographies such as “Liar’s Poker.” The
FEP provides books and lunches, and has also funded Wall Street Journal
subscriptions for some of the students at their request.
Sponsors have also been invited to send visitors to the group: one visitor has
attended so far, and there are two more lined up for later in the Spring.
Thank you so much for [the
reading group] lunch again this
week! It is my favorite part of
the week.
My Dad is ecstatic that I am in this
group, and I absolutely love it!
Lunch group participants
Financial Market seminar
Spring 2008
FEP Director Emma Rasiel is teaching a class on the financial markets to 24
students (mostly sophomores). The goal of this course is to expand students'
awareness and understanding of financial markets, products offered and the
interplay of macroeconomics on asset market movements and valuation.
Each FEP sponsor has been invited to send a guest lecturer to speak to the
class. Lectures so far include:
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An overview of current challenges facing the investment banking industry
Introduction to investment banking: corporate valuation
Update on the mortgage market, particularly the subprime sector
Hedge funds: strategies and products
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March 2008
Financial Education Partnership at Duke University
Alternative Sponsorship Options
Undergraduate Research Projects
Selected students are invited to work on faculty-directed independent research,
as requested by and on behalf of Sponsors. This provides sponsors the
opportunity to obtain detailed, relevant research, and to interact with carefullyselected students who have been chosen to work on these projects.
CDO Market Analysis
Spring 2007
ƒ Sponsor provided detailed deal-level information on CDO deals across multiple
dealers and portfolio managers between 2003-2006.
ƒ Two students created a 40-page research product containing both qualitative
and quantitative analysis of deals, market leaders, and firm-level analysis of
leading dealers and portfolio managers.
Prime & Subprime Mortgage Foreclosure Analysis
Spring 2007
ƒ Using data from the Mortgage Bankers Association, two students carried out a
detailed statistical analysis of foreclosures in both prime and subprime markets:
ƒ Cross-sectional analysis at the state- and regional level.
ƒ Time series analysis at the aggregate level from 1998 – 2006.
ƒ Macroeconomic analysis, evaluating contemporaneous and lagged
correlations between mortgage foreclosures and key macro factors.
ƒ The students’ report was subsequently published as a research paper by the
sponsoring bank.
Swaptions Trading Strategy Analysis
The students’ report was
subsequently adapted into
a research publication by
the sponsor
2007-2008
ƒ Sponsor provided proprietary implied volatility data from the swaptions market
over an eight year period.
ƒ Two students analyzed various short gamma trading strategies, evaluating daily
and cumulative P&L on these strategies over the entire data period.
ƒ Research also included the predictive accuracy of the proprietary implied
volatility for future realized volatility.
ƒ The students have subsequently written up their analysis as a joint Honors
Thesis, as part of their candidacy for Graduation with Distinction in May 2008.
Contribution of Index Volatility to an Equity Portfolio
Data and graphics from this
report
were
subsequently
utilized as part of the sponsor’s
sales and marketing materials
The students have subsequently
written up their analysis as an
Honors Thesis, towards their
candidacy for Graduation with
Distinction in May 2008
Spring 2008
ƒ Using publicly available data, two students analyzed the contribution of S&P 500
volatility futures (VX) to a well diversified equity portfolio in various contexts:
ƒ As an asset within a passive buy-and-hold portfolio.
ƒ As a hedge against an anticipated drop in the US equity markets over a
specified time period.
ƒ The students have further extended their analysis into a joint Honors Thesis, as
part of their candidacy for Graduation with Distinction in May 2008.
ƒ Aspects of the students’ analysis has been incorporated into a research paper to
be published by the sponsoring bank.
These students have submitted
this research as an Honors
Thesis. Their report has also
been incorporated into a
forthcoming publication by the
Sponsor.
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March 2008
Financial Education Partnership at Duke University
Feedback
Interviews yesterday went exceptionally well and, as usual, both
my colleagues and I were thoroughly impressed by the caliber of
the students we met.
I was most impressed by how
students…explained the origins of the current volatility in financial
markets. Responses included detailed explanations of the collapse
of the housing market, subprime loans and CDOs, as well as the
reluctance of banks to extend credit in this uncertain market
environment. We've hired [Duke] students in the past and I'm
confident we'll continue to do so in the future. They honestly seem
the best prepared for a career in finance…
Associate at a Sponsor Bank
A liberal arts education is excellent preparation for any career.
But students need experiences outside the classroom if they
are to be competitive candidates in the real world. The FEP
helps students apply the knowledge and concepts acquired
through their formal education, and learn the skills that will be
essential for their success on the job. Through the FEP, Duke
students have the best of both worlds: a top-class liberal arts
education combined with the opportunity to prove themselves
outside the classroom.
Sheila J. Curran, Fannie Mitchell Executive Director,
Duke University Career Center
Financial Education Partnership (FEP)
Emma Rasiel, PhD
Director
(919) 660 1837
ebr4@duke.edu
Clair Raver
Program Coordinator
(919) 660 1817
clr17@duke.edu
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