Threshold Concepts : A Disciplinary Enquiry in Quantitative Finance

The paper explored threshold concepts, as described by Meyers and Land (2003), in quantitative finance. While pedagogic studies of threshold concepts have been carried out for economics, maths (calculus) and accounting, nothing comparable has been published for finance. Quantitative finance is a discipline of high conceptual density, as it builds on models ranging from physical diffusion processes to probabilistic change of measure argument. It is suggested that deficiency in mathematical skill and misunderstanding of basic knowledge made learners to entrench in surface learning quickly.It was found that fluent recombination of techniques from different mathematical domains is required in order to practice in the discipline. It is further necessesary to re-work basic knowledge using the threshold concepts of risk neutrality, pricing vs. valuation, and incomplete markets. A map of threshold concepts in quantitative finance was developed, and illustrations of how expert practitioners mapped those concepts dynamically (in class) were collected. The enquiry was based on systematic teaching observation and analysis of curriculum documentation carried out for the Certificate in Quantitative Finance, a professional qualification programme of study