Financial engineering is the process of applying computational methods in order to improve and facilitate financial decision making and to create new financial instruments and strategies. Its goal is to determine the risk created by certain financial instruments.
Financial engineering combines financial theory with the tools of applied mathematics, the practice of programming and engineering methodologies utilizing various methods of computational intelligence, mathematical finance, numerical methods and computer simulations.
The applied computational method include:
stochastic calculus,
multivariate calculus,
linear algebra,
differential equations,
probability theory
statistical inference
artificial neural network
support vector machines
evolutionary algorithm
fuzzy models.
Financial engineering often uses C++ as a programming language.