Nikhil Varaiya is a finance professor and director of graduate programs at San Diego State University. He has also held teaching positions at Southern Methodist University and the University of Washington. He earned a Bachelor of Science in mathematics and a Master of Arts in economics from Bombay University. He completed his MBA and PhD in finance at the University of Washington.
Nikhil has received recognition several times, as the repeated recipient of an award for outstanding faculty. He also served as the finance department chair at San Diego State University from 1991 until 2008. He is a former vice president of professional development of the San Diego Chapter of Financial Executives International. Nikhil’s articles have appeared in numerous banking and finance publications.
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What is the study of finance?
From the perspective of corporations, the study of finance is about: (i) determining the funding/financing needs of companies as they create products/services to serve customers, and (ii) about identifying sources (debt, equity, convertible securities etc.) and terms on which a firm will obtain needed funds. From the perspective of individuals the study of finance is about managing wealth: how should individuals manage their consumption, savings, and investments (in stocks, bonds, commodities etc.) over their life cycle.
What do you find most interesting about finance?
Finance addresses “real-world” decisions of firms and individuals; it is intellectually challenging, and professionally rewarding.
What is your least favorite aspect of finance?
You are dealing with vast amounts of accounting, economic, and financial information that in the digital world can be overwhelming; staring at computer screens, and spreadsheets can be tiring.
Are there subfields of finance that students might not be aware of?
Specialized fields such as actuarial science, oil & gas financing, project financing come to mind.
What careers do students commonly pursue with a degree in finance?
Careers in banking: credit analyst, corporate finance — financial analyst, real estate analyst, investment banking associate.
Is a graduate degree preferable for a career in finance, or can someone enter the field with a bachelor’s degree?
You can enter the field with an undergraduate degree especially for starting positions in banking, corporate finance, and real estate; especially, with larger organizations in these fields you typically will go through a corporate training program. As one progresses in their career, a graduate degree may become necessary.
What personality traits do you think a student should have in order to be successful in a finance program?
An analytical focus, comfort with numbers, good oral and written communication skills, expertise in Excel, PowerPoint, and other software platforms that are used in financial modeling.
What electives would you recommend that a student in a finance program take?
Electives in accounting, database systems, product pricing, marketing, international finance, and case courses in finance.
What study tips would you give to a student to help him or her succeed in a finance program?
Develop quantitative skills — strong problem-solving skills by completing end-of-chapter problems in finance textbooks. Get very comfortable with accounting statements.
Do you think finance is a subject that can be studied online, or is a traditional class environment ideal?
Some finance classes could be studied online but courses that involve cases & those dealing with advanced material/concepts are, in my judgment, better completed in a traditional class environment.
What subjects should a prospective student of finance study before entering a formal college program?
Basic understanding of micro and macro economics, statistics, fluency in use of standard word-processing, presentation, and spreadsheet programs.
What pieces of advice, or caution, would you offer to a prospective student of finance?
This is a demanding discipline but with substantial economic rewards in the long-run. Long-term career advancement requires that you understand how finance fits in with operations, and marketing functions in a firm. Successful firms maintain a strong and continuing balance across these three areas.