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The fact is that they called the trade 'financial engineering' but as a matter of fact, it is a lot of finance but very very little engineering....
by pfortuny 14y ago
The fact is that they called the trade 'financial engineering' but as a matter of fact, it is a lot of finance but very very little engineering....
- tanzam75 14y agoThe "engineering" in financial engineering does not refer to engineering as a technical profession. Rather, it refers to engineering in the sense of "engineered lumber." Engineered lumber is when you glue a bunch of different woods together. The resulting product has different properties from any of the original woods. It is more profitable for the lumber company because it can be sold at a price premium. Similarly, financial engineering involves packaging up multiple financial products into a more complicated product. The product can then be sold at a higher price to gullible fools, aka "customers."