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Financial Modeling

Objectives

This course is designed to provide students with a strong foundation in Excel and VBA tools for financial modelling. We will also cover some basic Matlab functionalities. Broad topics include Excel functions (financial, arithmetic, text, lookup and array), databases and tables, Bloomberg data and Excel, VBA to enhance excel experience and an introduction to Matlab. We will seek a balance between describing Excel tools, developing VBA code and their applicability to financial modelling. Emphasis will be on problem solving and lectures will concentrate on practical examples to describe the tools and their applicability.

General characterization

Code

2270

Credits

3.5

Responsible teacher

Afonso Fuzeta Eça

Hours

Weekly - Available soon

Total - Available soon

Teaching language

English

Prerequisites



Bibliography

Resources

The textbook is: Rees, M., Financial modelling in practice

There will be documents posted for download on the class web page.

Teaching method

This course will have 6 lectures and 6 e-learning sessions, instead of 6x 3h sessions the course will have 6x 1.5h sessions and 6 e-learning sessions of equivalent duration. Although e-learning sessions are not in the schedule, they have an appropriate order and should be completed in the appropriate time frame.
In class, we will concentrate on financial modelling case studies (how to build models, how to go from a theoretical model to a client ready deliverable). The e-learning component focuses on the tools (ie how to use excel functions and excel techniques), the videos guide you through the examples and you’ll have a set of exercises to practice with each of the e- learning sessions. In the beginning of each class there will be time to review the e-learning sessions.

Evaluation method

TThe final grade will be a weighted average of the grades in the assignments:

•    Group assignments  (2 x 25%)    50%
•    Exam    50%

Subject matter

Class 1 Introduction to the course and principles of model building

E-learning session 1 + 2: Data and Conditional functions

Class 2 Analysing returns

E-learning session 3: Array functions

Class 3 Pricing with discounted cash flow methods

E-learning session 4: Offset and Indirect functions
 

Class 4 Estimating expected returns

E-learning session 5: VBA I - Macro recorder and For next cycles

Class 5 Pricing assets by simulation

E-learning session 6: VBA II - For next cycles

Class 6 Optimization