They are complementary courses on mathematical finance. Stat 123 focuses on derivatives, with an emphasis on interest rate derivatives and issues about trading them in real markets. Stat 170 focuses on the pricing of assets, portfolio analysis, and derivative pricing. The mathematical level of Stat 170 is somewhat higher than that of Stat 123, e.g., the course delves into topics such as Brownian motion, stochastic differential equations, and Monte Carlo methods.
Students contemplating a career in investment management, sales and trading, investment banking, hedge funds, or policy-making should consider taking Stat 123 and Econ 1723. Students aiming for a research-oriented (“quant”) position in finance, considering graduate school in finance or economics, or who want further mathematical depth in the subject, should consider taking Stat 170.