Robert A. Jarrow
Ronald P. & Susan E. Lynch Professor of Investment Management
Operations Research and Information Engineering
451 Sage Hall
Financial engineering is a process that utilizes existing financial instruments to create a new and enhanced product of some type. Just about any combination of financial instruments and products can be used in financial engineering. The process may involve a simple union between two products, or make use of several different products to create a new product that provides benefits that none of the other instruments could manage on their own.