Financial Modeling

Financial Modeling

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This textbook aims to bridge a gap between theory and practice in financial courses by providing a nuts-and-bolts guide to solving common financial models with spreadsheets. Simon Benninga takes the reader step by step through each model, showing how it can be solved using Microsoft Excel. In this sense, this is a finance "cookbook", providing recipes with lists of ingredients and instructions. Areas covered include the computation of corporate finance problems, standard portfolio problems, option pricing and applications, and duration and immunization. The author includes a set of chapters dealing with advanced techniques, including random number generation, matrix manipulation, and the Gauss-Seidel method. Although the reader should know enough about Excel to set up a simple spreadsheet, the author explains advanced Excel techniques such as functions, macros, the use of data tables, and VBA programming. The book comes with a disk containing Excel worksheets and solutions to end-of-chapter exercises.
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Product details

  • Mixed media product | 400 pages
  • 181 x 235 x 38.1mm | 940g
  • MIT Press
  • Cambridge, Mass., United States
  • English
  • Ill.
  • 0262024373
  • 9780262024372

Table of contents

Part 1 Corporate finance models: financial statement modelling; using financial statement models for valuation; the financial analysis of leasing; the financial analysis of leveraged leases. Part 2 Portfolio models: portfolio models - introduction; calculating the variance-covariance matrix; calculating efficient portfolios when there are not short sale restrictions; estimating Betas and the security market line; efficient portfolios without short sales. Part 3 Option pricing models: an introduction to Options; the binomial option-pricing model; the Longnormal distribution; the Black-Scholes model; portfolio insurance. Part 4 Bonds and duration: duration; immunization strategies; calculating default-adjusted expected bond returns; duration and the cheapest-to-deliver- problem for treasury bond futures contracts. Part 5 Technical considerations: generating random numbers; data table commands; matrices; the Gauss-Seidel method; Excel functions. Part 6 Introduction to Visual Basic for Applications: programming in Microsoft Excel; introduction to User-Defined functions in Visual-Basic for Applications.
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Rating details

173 ratings
4 out of 5 stars
5 36% (63)
4 37% (64)
3 18% (31)
2 8% (13)
1 1% (2)
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