FINANCIAL MODELS (APPLICATIONS) PROF. SILVIA MUZZIOLI

COURSE SYLLABUS OFFICE: East wing, Room 71 OFFICE HOURS: 15,30-17,30 THURSDAY OFFICE PHONE: 059-2056771 (leave a message; please speak loud enough and clearly) E-MAIL ADDRESS: silvia.muzzioli@unimore.it WEB PAGE: http://morespace.unimore.it/silviamuzzioli/ http://personale.unimore.it/AddressBook/Home/smuzziol COURSE PAGE: http://morespace.unimore.it/silviamuzzioli/financial-models-applications/ pwd: 1972 CLASS HOURS: 12:00-13:35 MON TUE & THU

MOTIVATION OF THE COURSE Companies of all sizes use financial models to analyze and plan business operations. The majority of Excel users take advantage of only a very small portion of the Excel software. This course is intended to show students how to build an effective financial model using the functionality and appealing usability of Excel. The aim of the course is to implement with the use of real data (obtained from the data bank DATASTREAM), the most common statistical and financial functions of the Excel spreadsheet useful in business applications.

Teaching with excel Effective and Efficient Use of Excel in Teaching Financial Ratios and Cash Flows Mark Tengesdal Texas Woman's University September 16, 2011 Midwest Finance Association 2012 Annual Meetings Paper Abstract:      This paper discusses using a particular Excel assignment in a Corporate Finance course at the undergraduate and graduate level. Excel worksheets allow students to more readily see interactions between concepts, and a finance major who is sufficiently skilled in Excel has an advantage entering the job market over those who are not. The paper discusses using an Excel assignment that requires students to complete financial statements and calculate financial ratios and cash flows. It also discusses methods for evaluating the worksheets that the students turn in. Grading Excel assignments can be tedious. This paper also discusses using resources within Excel to reducing the time spent on evaluating student work and making it more efficient. Number of Pages in PDF File: 14 Keywords: Excel, Spreadsheets, Ratios, Cash Flows JEL Classification: A22, A23, G00 working papers series

FMA ANNUAL MEETING http://www.fma.org/Orlando/OrlandoProgram.htm See session #115

Aim of the course Learn how to use a data-bank Learn excel spreadsheets functionalities Improve decision making ability Provide sound simple and fast answers to financial problems Improve the quantitative and graphical representation of the problems

COURSE DETAILS Prerequisites:   Basics of Financial Mathematics and Statistics. Teaching: 42 hours, classes are held in a computer Lab. Grading:  Written (in a computer lab) and oral exam.

Texts and useful material: Simon Benninga, Financial modelling, third edition Isaac Gottlieb, “Next Generation Excel: Modeling In Excel For Analysts And MBAs” (For MS Windows And Mac OS), 2nd Edition. On-line help manual for Excel-Datastream Web-site of the course: http://morespace.unimore.it/silviamuzzioli/ Recording of the lessons

Organization: HANDS ON APPROACH: Classes are held in a computer lab. Lecture-lab course in which topics are presented by the instructor, practice is mandatory during classes Informal tone and time for discussion Importance of your feedback: Your ideas, comments, suggestions, questions are warmly welcome. You are encouraged to take advantage of instructor office hours for help with coursework or anything else connected with the course and your progress. No part of your grade will be based on anything other than your coursework and final exam. Previous year evaluation of the course available at: http://saf.unimore.it/dev/infodocentiesse3/adf.asp?AA=2013&ADID=19998&CDSID=10288&DOCID=2503

Grading: Written and oral exam both compulsory Written part: held in a computer Lab: 6 exercises to solve in excel Oral part: two questions: one on the data-bank DATASTREAM, the other on general Excel functions Only for the students who sit the exam at the first round of exams: it is possible to solve three exercises at home in groups: the grade for the exercise is 0-2 points and will be added to the final grade. More info and old exams: http://morespace.unimore.it/silviamuzzioli/

COURSE TOPICS The course will cover the following topics: THE DATA BANK DATASTREAM BASIC FINANCIAL CALCULATION: net present value, future values, internal rate of return, loan tables BONDS: Duration, Convexity and Immunization startegies The term structure: yield curve charts

COURSE TOPICS PORTFOLIO MODELS: The efficient portfolios, the variance covariance matrix, the security market line The Value at Risk OPTION PRICING MODELS: The binomial model The log-normal distribution and the Black-Scholes model

USE FUNCTIONS AS:

Use the goal seek and the solver

Graphs in Excel

Use matrices and data tables

VAR

The binomial model

Monte Carlo simulations

Frequency distribution

Black-Scholes model and implied volatility