“O.R. is the application of scientific methods, techniques and tools to problems involving the operations of a system so as to provide those in control of the system with optimum solution to the problem. -Churchman, Ackoff and Aronoff.” This report includes the application of OR (Operations research) in financial industry. How OR's instruments would avail in solving quandaries such as portfolio management, asset allocation, investment strategies and imperil evaluation etc. Finance management is a very delicate process and needs a very profound understanding in order to realise its functioning. Most of the times avail of experts is required to understand it’s working. OR gives a very efficient method to solve things and get the optimal solution thereby minimizing extra costs and jeopardizations. The topics discussed in the report are 1) Monte Carlo Simulation 2) Index Tracking Fund (Includes Quadratic Programming) 3) Data Envelopment Analysis (DEA). It is difficult to utilize operations research when you wish to make decisions but the conditions are not matched, and when differing objectives conflict with each other. The problems which are being solved through this report are 1) Financial Risk Management 2) Passive Portfolio Optimization 3) Banking Operations and Decision Making.