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30 Mar 2016

Focus on Carole Bernard, professor in Finance

Carole Bernard is an expert in Financial Markets and member of the Finance Innovation and Governance team.

The research department wants to know more than her job and its specificity,  her expertise and her background before to come here. Another way to talk about research ...

You arrived in Grenoble Ecole de Management last year in 2015. What is your career path before that?

I graduated from Ecole Normale Supérieure de Cachan (France) in 2003 and obtained my Ph.D. in Finance from the Institute of Financial and Actuarial Sciences in Lyon (France) in 2005. I worked then at the University of Waterloo in Canada from 2006 to December 2014 as postdoctoral fellow, assistant professor and finally as associate professor with tenure.

You are expert in financial markets, can you explain what kind research themes/subjects this expertise includes ?

I have a wide range of research interests in finance, insurance and theoretical economics. Specifically, I have been working on the design and risk management of life insurance contracts. I have also developed expertise in financial markets with the pricing and risk management of financial derivatives and the study of optimal investment strategies.  Recently, I have also worked in the areas of behavioral finance and modelling optimal decision making for investors. I studied the optimal design of retail investment products and optimal portfolio selection.

In 2015 you received a Redington Award for your article : “Optimal Portfolios Under Worst Case Scenarios”. What is this prize ?

The Redington prize is a 10,000$ award sponsored by the Investment Section of the Society of actuary (U.S. professional association for actuaries). It recognizes the best paper written on an investment-related topic with the conditions that it has been published and that at least one of the co-author of the paper is an actuary. My paper “Optimal Portfolios Under Worst Case Scenarios” was published in Quantitative Finance (CNRS** journal). It has been jointly written with my former PhD student and actuary, Jit Seng Chen (FSA, Fellow of the Society of actuary) and Professor Steven Vanduffel (cosupervisor of the PhD student and professor at Vrije Universiteit Brussel). In this paper, we propose to design new investment strategies that are the cheapest portfolios to offer protection in the worst states of the economy. For example, we can derive the cheapest financial strategy fully invested in the market but that turns out to be negatively correlated with the market when the S&P500 goes down.

What excites you in your job ? In research ? In finance ?

My first motivation to work in finance was to apply mathematics to solve some real-world problems. I found that a lot contracts issued by the insurance and finance industries are complex and challenging for most people. One of my research goals is to detect the best opportunities and to help retail investors in their decision making.

There are many jobs in the finance and insurance industries but the job of professor in finance is a dream job. I find both the research and teaching associated with an academic position to be extremely fulfilling. Teaching can be really enjoyable when you meet curious students, who are eager to learn, who ask questions to better understand and not just to know whether the topic will be at the final exam! In fact I most enjoy teaching when I manage to convince my students that learning finance is a wonderful opportunity and not just a necessary step to pass an exam for their degree.

I find research to be very rewarding. I chose an academic career for the freedom to work on a topic I am passionate about. Research brings a lot of emotions, sometimes excitement when finding new ideas, and making an impact on society, sometimes disappointment when some of your ideas get too much criticized or rejected or when you do not find a satisfactory solution to your research question. Research is a hobby and you can never get bored when you start doing research. It is a continuous learning process. Research gets you to travel around the world to disseminate your findings in conferences and launch new collaborations during research visits in foreign universities. I like challenging students with research problems: the best students appreciate the opportunity to go beyond the confines of their textbook. Ultimately, the job of a professor is also to guide and supervise students. I also enjoy this part of my job and I am very proud of my students when they succeed to ultimately do research by themselves.

This might be a cliché, but Finance seems to be a men’s field. Do you agree? And how would you define your place as a woman in this domain ?

I disagree. Finance may be seen as a men’s field when you think about the stressful job of a trader. To me, the cliché is that finance requires difficult mathematics and that mathematics are for men only. Women may not have confidence in their mathematical skills but many opportunities in finance for women exist.


Carole Bernard

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