Financial Modeling with Excel

Tentative Topic Outline

The course will cover the following topics:

Introduction to Spreadsheets and Models

• Basic Excel features
• Advanced Excel features
• Excel Techniques (Data tables, Goal Seek, Excel functions, Excel hints etc.)
• Guide to Excel Modeling

Portfolio management

• Portfolio Models - Introduction
• Equilibrium in Capital Markets
• Estimating Betas and the Security Market Line
• Efficient Portfolios without Short Sales
• Simulating Stock Prices
• Simulations for Investments

Equity Derivatives

• Introduction to Options
• The Binomial Option Pricing Model
• Exotic options

An important aspect of the course is gaining practical experience in formatting, visualization and analysis of financial data. By numerous examples the students will gain insides on how to feed models with financial data and answer basic questions in portfolio management and asset pricing. At the end of the course students should be able to visualize financial data, optimize portfolios and price options.

Attendance will not be taken. But if students decide to attend the class, they should arrive on time and the use of cell-phones is not permitted. The use of laptops is permitted for running specific course-related applications.

Exam:

There will be a take-home exam:

• The students are expected to work on their own laptops/PCs during the exam.
• You must prepare your exam using Excel and word processing software on your computer.
• Mastering or navigating technology should be your first concern. Make sure your computer, especially at home, is technically capable and has the appropriate internet connection speed.
• Taking the exam is not the time to experiment with passwords and/or operating system! Make all necessary updates of your MS Office software and your operating system beforehand. For example,1-2 days before the exam check for updates by selecting the Start button, then go to Settings -> Update & security -> Windows Update, and select Check for updates.
• Exam questions will be distributed in a soft copy (electronic file) on the day of the exam.
• Name your file with your student ID number: StudentID.xlsx and/or StudentID.docx. The file will be separated from the email when corrected; therefore, the exam MUST be identifiable to the professor by your student ID number.
• It is recommended that you name and save the exam files before beginning the exam.
• SAVE frequently!
• You are also advised to create a copy of the exam files on another storage medium (i.e. synchronize it to your Dropbox, or occasionally copy the document onto a flash drive or network drive).
• Unless instructed otherwise, submit your exam by e-mail to the exam deposit examdeposit@gmail.com . Attach the Excel and Word exam files. Only one submission will be accepted.
• The exam will be time-stamped, and your exam must be emailed within the allotted time. Late submissions will be severely penalized.
• Email problems and internet problemswill not be accepted as an excuse for late submissions. It is student's responsibility to make sure that your email works properly and that the professor receives the submission on time.
• The exam must be taken completely alone. Showing it or discussing it with anybody is forbidden, including (but not limited to) the other students in the course in current or previous years. It is also forbidden to use any solutions to similar problems from previous years as reference material.
• You are NOT allowed to submit questions to internet discussion groups, etc.