1. 10. Visual Basic Functions

2. Open Excel

3. Click File -> Save As

4. Save As a Excel Macro-Enabled Workbook

5. Click File -> Options

6. Click Customize Ribbon

7. Tick Developer

8. Click OK

9. Select Developer menu

10. Functions Excel uses functions to do most calculations =SUM(x) =COUNTIF(x,y) =VLOOKUP(x,y,z ) They take an input value e.g. x, y, z then perform a calculation and return a result We can write our own functions in Visual Basic

11. Area of a rectangle We want to be able to type in a function such as =RectangleArea(Height, Width) Excel should do the following calculation Area = Height * Width Excel should then give us the result

12. Click on Visual Basic

13. Click Insert -> Module

14. Type Function RectangleArea(Height, Width)

15. Press Enter on Keyboard and it will add End Function

16. This means Excel asks you for Height and Width It will then do calculations with these variables

17. Type RectangleArea = Height * Width

18. Click Save

19. Close Visual Basic editor

20. Click Formulas -> Insert Function

21. Select Category All

22. Scroll down to RectangleArea

23. Click OK

24. You are asked for Height and Weight

25. Type in Height 3 and Width 2

26. Click OK

27. The result of the function is displayed in the cell

28. You can also use this function by typing into the cell directly

29. Click cell B1

30. Type =RectangleArea(5,3) and press Enter

31. Calculates the result for you

32. Pricing a Futures Contract Traders may want to calculate futures prices We want Excel to calculate the Futures price by providing the Spot price, Risk-Free rate and Time =Future(Spot, Rf, Time) Excel should calculate the following formula Future = (Spot)e (Rf)(Time)

33. Click Visual Basic

34. Type Function Future(Spot, Rf, Time) Future = Spot * exp(Rf * Time)

35. Save and Close

36. Type in the following input values

37. In cell D10 type =Future(D6,D7,D8) and press Enter

38. Calculates Futures Price

39. Challenge Create a function which will calculate the price of a share using the Dividend Growth model You want a user to be able to use a function where they get the price by typing in a function such as: =DGMPrice (Dividend, InterestRate, GrowthRate) Excel should then do the following calculation and return the result DGMPrice = Dividend / (InterestRate – GrowthRate) What is the fair price of a share if it has a dividend of £2, interest rate of 0.06, and growth rate of 0.02?