Academic journal article Journal of Financial Education

Prioritizing Time for Finance Undergraduates

Academic journal article Journal of Financial Education

Prioritizing Time for Finance Undergraduates

Article excerpt

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INTRODUCTION

For many undergraduate finance students finding a job in the financial industry upon graduation is not an easy task. The recent financial crisis and slow economic recovery have undoubtedly required additional challenges to this mission by cutting numerous positions from investment banks, hedge funds, retail banks, mutual funds, business consulting firms, mortgage companies, brokerage houses, and other financial service enterprises. In recent years, the professional world has become more competitive than ever before and the financial sector is today exceptionally selective at choosing its employees.

To enhance the students' likelihoods of securing relevant jobs upon graduation, more universities these days encourage undergraduate finance students to not only excel within their academic studies but also to acquire additional work experience in the form of various corporate internships. Furthermore, business colleges routinely emphasize to their undergraduate students the importance of continuous networking throughout the college years. Nonetheless, studying, interning, and networking are all time-consuming activities. These three important activities are, at least to some degree, mutually exclusive, and essentially they all come at the expense of one another.1 Students who devote more time for studying understandably have less time for networking through different social events and professional meetings. Students who spend extra hours and additional effort at their internship roles naturally allocate less time for studying and so forth.

The purpose of the present study is to offer an analytical tool that prioritizes and optimizes the time allocated to these three valid duties for respective undergraduate finance students.' Business schools can calibrate the proposed optimization model based on accumulated alumni surveys and further utilize the model's results to recommend to current students better strategies for maximizing their future fulltime job salaries. The suggested model hereafter presumes that (1) studying, gaining work experience through corporate internships, and social networking all contribute to the ultimate endeavor of finding a relevant job upon graduation and hence to better future payoffs, (2) students should dedicate, at the minimum, a certain number of hours per week to successfully accomplish each individual task, (3) there is a limited amount of time per week that students can devote to these three activities, (4) the respective contribution of each activity can be assessed in dollar amount from accumulated alumni surveys, (5) these distinct contributions to future returns are not necessarily the same among the three activities and across different business schools, and (6) it is the common objective of both universities and students to maximize the expected return of the latter from future fulltime jobs upon graduation.

Our proposed model relies on standard mathematical techniques of optimization under identifiable constraints. In addition, we deploy diminishing exponential return functions that identify the expected future payoff upon graduation. These generic functions allow us to depict a large spectrum of profitability patterns associated with the three core duties of students - studying, interning, and networking. To provide greater insight into the theory, we further develop two realistic numerical examples that demonstrate the two extreme circumstances of the model. While the first example requires merely a single iteration before finding the optimal time distribution, the second paradigm utilizes three iterations before allocating the optimal solutions. Overall, the current scheme can serve universities in better designing time preferences for their students during the college years. These optimal time allocations have significant implications towards the academic programs at the corresponding institutions, including the intensity of homework, exams, projects, reports, or any other time-consuming scholarly assignments. …

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