Financial Modeling with Excel (MiE & MiM)

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 date: Last class (18.04.2019, from 13:45 till 14:45)

Please review the rules carefully.
If student feels uncomfortable with any of these rules, then he/she should NOT take this course.

Take-home exam rules:

• Your responsibility is to have access to a technically capable laptop/PC with Excel (and Solver).
• Your responsibility is to make sure your laptop is fully charged, and that you have access to a charger.
• Your responsibility is to have functioning internet connection during the exam.
• If you decide to take the exam with inferior equipment you do it at your own peril.
• Make all necessary updates of your MS Office software and your operating system beforehand. To check for updates 1-2 days before the exam, select the Start button, then go to Settings → Update & security → Windows Update, and select → Check for updates. Restart the system.
• 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!
• The exam must be taken completely alone. Showing it or discussing it with anybody is FORBIDDEN.
• Discussing it with other students in the course in current or previous years;
• Distributing and sharing any exam information with anybody during the exam (i.e. students are not allowed to distribute printouts, post exam files to discussion forums, post exam files to shared folders, email the exam files).
• I will absolutely not tolerate any dishonesty. Your work must be your own.
• If I find a reason to doubt your honesty (i.e. in form of identical errors or copied answers), both students will receive a grade of 5.0.
• I can only excuse students with a note from a doctor. Please inform me the latest 1h before the start of the exam if you feel unwell and you have a note from a doctor. Once the exam starts, I cannot excuse students anymore.
• Late submission will be penalized as follows:

1. Handing in 1 min. late: -5 points
2. Handing in 2 min. late: -10 points
3. Handing in 3 min. late: -15 points
4. Handing in 4+ min. late: fail

• Neatness counts! Make your final product easy to read and more self-explicable, and you will get a better grade. Provide an explicit answer in Excel, i.e. which part of your sheet answers which question.