Financial Modeling

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.