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Description of Financial Modeling 3e +CD

Too often, finance courses stop short of making a connection between textbook finance and the problems of real-world business. Financial Modeling bridges this gap between theory and practice 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. The long-awaited third edition of this standard text maintains the "cookbook" features and Excel dependence that have made the first and second editions so popular. It also offers significant new material, with new chapters covering such topics as bank valuation, the Black-Litterman approach to portfolio optimization, Monte Carlo methods and their applications to option pricing, and using array functions and formulas. Other chapters, including those on basic financial calculations, portfolio models, calculating the variance-covariance matrix, and generating random numbers, have been revised, with many offering substantially new and improved material.
Other areas covered include financial statement modeling, leasing, standard portfolio problems, value at risk (VaR), real options, duration and immunization, and term structure modeling. Technical chapters treat such topics as data tables, matrices, the Gauss-Seidel method, and tips for using Excel. The last section of the text covers the Visual Basic for Applications (VBA) techniques needed for the book. The accompanying CD contains Excel worksheets and solutions to end-of-chapter exercises. Praise for the previous editions: "Benninga has a clear writing style and uses numerous illustrations, which make this book one of the best texts on using Excel for finance that I've seen." --Ed McCarthy, Ticker Magazine "The author describes this as a 'cookbook' and that is a good analogy...Its breadth is extensive, covering simple present valuing and cost of capital ...to the likes of real options and early exercise of American-style options...A worthwhile acquisition."
--Paul Dentskevitch, Risk Magazine "Financial Modeling is highly-recommended to readers who are interested in an introduction to basic, traditional approaches to financial modeling and analysis, as well as to those who want to learn more about applying spreadsheet software to financial analysis." --Edward Weiss, Journal of Computational Intelligence in Finance "Financial Modeling belongs on the desk of every finance professional. Its no-nonsense, hands-on approach makes it an indispensable tool." --Hal R. Varian, Dean, School of Information Management and Systems, University of California, Berkeley "This is applied finance theory for the professional at its best. As a student, I and countless others learnt the intricacies of Lotus and financial theory from Professor Benninga's first book--Numerical Techniques in Finance. Now, as a professional, I do not have to 're-invent the wheel' in Excel. An invaluable guide. A must for all financial analysts." --Vikas Nath, Global Strategist, Emerging Equity Markets, Union Bank of Switzerland, London

Title Information

ISBN:

9780262026284

Pages:

752 pages

Format:

Hardback

Product Code:

250702

Publisher:

MIT Press

Published:

13/02/2008

Edition:

3rd Revised edition

Press and Industry Reviews

Praise for the previous editions:

"Benninga has a clear writing style and uses numerous illustrations, which make this book one of the best texts on using Excel for finance that I've seen."
- Ed McCarthy, Ticker Magazine

"The author describes this as a 'cookbook' and that is a good analogy.... Its breadth is extensive, covering simple present valuing and cost of capital ... to the likes of real options and early exercise of American-style options.... A worthwhile acquisition."
- Paul Dentskevitch, Risk Magazine

"Financial Modeling is highly-recommended to readers who are interested in an introduction to basic, traditional approaches to financial modeling and analysis, as well as to those who want to learn more about applying spreadsheet software to financial analysis."
- Edward Weiss, Journal of Computational Intelligence in Finance

"Financial Modeling belongs on the desk of every finance professional. Its no-nonsense, hands-on approach makes it an indispensable tool."
- Hal R. Varian, Dean, School of Information Management and Systems, University of California, Berkeley

"This is applied finance theory for the professional at its best. As a student, I and countless others learnt the intricacies of Lotus and financial theory from Professor Benninga's first book - Numerical Techniques in Finance. Now, as a professional, I do not have to 're-invent the wheel' in Excel. An invaluable guide. A must for all financial analysts."
- Vikas Nath, Global Strategist, Emerging Equity Markets, Union Bank of Switzerland, London

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About Simon Benninga

Simon Benninga is Professor of Finance at Tel Aviv University and Visiting Professor of Finance at the Wharton School at the University of Pennsylvania.

Contents of Financial Modeling 3e +CD

I Corporate Finance Models
1 Basic Financial Calculations
2 Calculating the Cost of Capital
3 Financial Statement Modeling
4 Building a Financial Model: The Case of PPG Corp.
5 Bank Valuation
6 The Financial Analysis of Leasing
7 The Financial Analysis of Leveraged Leases

II Portfolio Models
8 Portfolio Models – Introduction
9 Calculating Efficient Portfolios When There Are No Short-Sale Restrictions
10 Calculating the Variance – Covariance Matrix
11 Estimating Betas and the Security Market Line
12 Efficient Portfolios without Short Sales
13 The Black-Litterman Approach to Portfolio Optimization
14 Event Studies
15 Value at Risk

III Option-Pricing Models
16 An Introduction to Options
17 The Binomial Option-Pricing Model
18 The Lognormal Distribution
19 The Black-Scholes Model
20 Option Greeks
21 Portfolio Insurance
22 An Introduction to Monte Carlo Methods
23 Using Monte Carlo Methods For Option Pricing
24 Real Options

IV Bonds
25 Duration
26 Immunization Strategies
27 Modeling the Term Structure
28 Calculating Default-Adjusted Expected Bond Returns

V Technical Considerations
29 Generating Random Numbers
30 Data Tables
31 Matrices
32 The Gauss-Seidel Method
33 Excel Functions
34 Using Array Functions and Formulas
35 Some Excel Hints

VI Introduction to Visual Basic for Applications
36 User-Defined Functions with VBA
37 Types and Loops
38 Macros and User Interaction
39 Arrays
40 Objects and Add-Ins
41 Information from the Web

Appendix 1: Excerpts from the Help File
Appendix 2: The R1C1 Reference Style

References
Index