You are previewing Financial Analysis and Modeling Using Excel and VBA.
O'Reilly logo
Financial Analysis and Modeling Using Excel and VBA

Book Description

An updated look at the theory and practice of financial analysis and modeling

Financial Analysis and Modeling Using Excel and VBA, Second Edition presents a comprehensive approach to analyzing financial problems and developing simple to sophisticated financial models in all major areas of finance using Excel 2007 and VBA (as well as earlier versions of both). This expanded and fully updated guide reviews all the necessary financial theory and concepts, and walks you through a wide range of real-world financial problems and models that you can learn from, use for practice, and easily adapt for work and classroom use. A companion CD-ROM includes several useful modeling tools and fully working versions of all the models discussed in the book.

  • Teaches financial analysis and modeling and illustrates advanced features of Excel and VBA, using a learn-by-doing approach

  • Contains detailed coverage of the powerful features of Excel 2007 essential for financial analysis and modeling, such as the Ribbon interface, PivotTables, data analysis, and statistical analysis

  • Other titles by Sengupta: Financial Modeling Using C++ and The Only Proven Road to Investment Success

  • Designed for self-study, classroom use, and reference

This comprehensive guide is an essential read for anyone who has to perform financial analysis or understand and implement financial models.

Table of Contents

  1. Copyright
  2. About This Book
    1. From the First Edition
  3. 1. Introduction to Financial Analysis and Modeling
    1. 1.1. My Assumptions about You and the Users of Your Models
      1. 1.1.1.
        1. 1.1.1.1. My Assumptions about You and the Users of Your Models
        2. 1.1.1.2. Excel and VBA as Modeling Tools
        3. 1.1.1.3. Independent and Dependent Variables
      2. 1.1.2. STEPS IN CREATING A MODEL
        1. 1.1.2.1. Step 1: Define and Structure the Problem
      3. 1.1.3. Step 2: Define the Input and Output Variables of the Model
        1. 1.1.3.1. Step 3: Decide Who Will Use the Model and How Often
        2. 1.1.3.2. Step 4: Understand the Financial and Mathematical Aspects of the Model
        3. 1.1.3.3. Step 5: Design the Model
        4. 1.1.3.4. Step 6: Create the Spreadsheets or Write the VBA Codes
        5. 1.1.3.5. Step 7: Test the Model
        6. 1.1.3.6. Step 8: Protect the Model
        7. 1.1.3.7. Step 9: Document the Model
        8. 1.1.3.8. Step 10: Update the Model as Necessary
      4. 1.1.4. HOW THIS BOOK IS ORGANIZED
  4. 1. Excel for Financial Analysis and Modeling
    1. 2. Excel 2007 and the Previous Versions
      1. 2.1. The New Features in Excel 2007
      2. 2.2. The New User Interface
        1. 2.2.1. THE OFFICE ICON
        2. 2.2.2. THE RIBBON
          1. 2.2.2.1. Minimizing the Ribbon
        3. 2.2.3. THE QUICK ACCESS TOOLBAR (QAT) AND CUSTOMIZING IT
        4. 2.2.4. THE SHORTCUT MENUS AND THE MINI TOOLBAR
        5. 2.2.5. FINDING SOME OF THE OLD TOOLS AND DIALOG BOXES
      3. 2.3. Other New Features
        1. 2.3.1. PIVOTTABLE
        2. 2.3.2. TABLE
        3. 2.3.3. PROFESSIONAL QUALITY CHARTS
        4. 2.3.4. CONDITIONAL FORMATTING
        5. 2.3.5. AUTOCOMPLETE FOR ENTERING FORMULAS
        6. 2.3.6. ONE INTEGRATED FUNCTION LIBRARY
        7. 2.3.7. STYLES AND THEMES
        8. 2.3.8. A MUCH LARGER GRID
        9. 2.3.9. PAGE LAYOUT VIEW
        10. 2.3.10. CONSOLIDATED OPTIONS
      4. 2.4. New File Formats in Excel 2007
    2. 3. Excel Basics
      1. 3.1. Improving Your Excel Skills
        1. 3.1.1. SAVING YOUR WORKBOOKS
          1. 3.1.1.1. Using Excel's AutoRecover
          2. 3.1.1.2. Using Excel's AutoSave (In Excel 97 and 2000)
          3. 3.1.1.3. Saving Workbooks under Different Version Names
        2. 3.1.2. USING EXCEL'S ONLINE HELP
          1. 3.1.2.1. Using Help In Excel 2007
          2. 3.1.2.2. Finding Help in Previous Versions of Excel
          3. 3.1.2.3. Getting Help with Menu Commands and Toolbar Buttons
          4. 3.1.2.4. Getting Help with the Options In Dialog Boxes
          5. 3.1.2.5. Using the Office Assistant to Get Help
          6. 3.1.2.6. Using the Full Help Window to Get Help
        3. 3.1.3. LEARNING EXCEL FEATURES
      2. 3.2. The Basic Excel Features
        1. 3.2.1. KEEPING YOUR WORKBOOKS AND RELATED FILE8 ORGANIZED
        2. 3.2.2. NAMING WORKBOOKS AND WORKSHEETS
        3. 3.2.3. FINDING THE COMMANDS YOU NEED
        4. 3.2.4. WORKING WITH WORKSHEETS
        5. 3.2.5. WORKING WITH ROWS, COLUMNS, AND CELLS
        6. 3.2.6. USING THE TOOLBARS
        7. 3.2.7. USING KEYBOARD SHORTCUTS
          1. 3.2.7.1. Excel 2007
          2. 3.2.7.2. Earlier Versions of Excel
        8. 3.2.8. NAVIGATING THE WORKSHEET
        9. 3.2.9. FORMATTING
        10. 3.2.10. ENTERING AND WORKING WITH FORMULAS
        11. 3.2.11. USING PASTE SPECIAL
        12. 3.2.12. CONTROLLING THE WORKSHEET VIEW
        13. 3.2.13. USING UNDO AND REDO
        14. 3.2.14. CUSTOMIZING THE EXCEL WORK ENVIRONMENT
        15. 3.2.15. CONTROLLING WHEN FORMULAS ARE CALCULATED
        16. 3.2.16. PRINTING
        17. 3.2.17. CREATING CHARTS
        18. 3.2.18. WORKING WITH MORE THAN ONE WORKBOOK
        19. 3.2.19. USING THE SCROLL LOCK
    3. 4. Advanced Excel Features
      1. 4.1. Learning the Features Efficiently
        1. 4.1.1.
          1. 4.1.1.1. Learning the Features Efficiently
          2. 4.1.1.2. Excel's Built-in Functions and the Analysis ToolPak
          3. 4.1.1.3. Arguments of Functions
          4. 4.1.1.4. Entering Functions
          5. 4.1.1.5. Installing and Accessing the Analysis ToolPak
          6. 4.1.1.6. A Key Difference between Functions and Tools in the Analysis ToolPak
        2. 4.1.2. COPYING FORMULAS USING ABSOLUTE AND RELATIVE CELL REFERENCES
          1. 4.1.2.1. Overview
          2. 4.1.2.2. Copying Using Relative Cell Reference
          3. 4.1.2.3. Copying Formulas with Absolute Cell References
          4. 4.1.2.4. Copying Formulas with Mixed Cell References
          5. 4.1.2.5. Choosing the Right Cell Reference When Creating Formulas
          6. 4.1.2.6. Additional Notes
        3. 4.1.3. CREATING NAMES FOR CELLS AND RANGES
          1. 4.1.3.1. Overview
          2. 4.1.3.2. Choosing Names
          3. 4.1.3.3. Creating Names Manually
          4. 4.1.3.4. Creating Names Automatically
          5. 4.1.3.5. Defining Names with Different Types of Cell and Range References
          6. 4.1.3.6. The Name Manager
          7. 4.1.3.7. Assigning Multiple Names to the Same Range
          8. 4.1.3.8. Deleting Names
          9. 4.1.3.9. Changing Names
          10. 4.1.3.10. Redefining Names
          11. 4.1.3.11. Creating a Table of Names
          12. 4.1.3.12. Using Workbook and Worksheet Level Names
          13. 4.1.3.13. Creating Other Types of Names
        4. 4.1.4. USING NAMES IN FORMULAS
          1. 4.1.4.1. Overview
          2. 4.1.4.2. Incorporating Names in Formulas
          3. 4.1.4.3. Changing Names In Existing Formulas
          4. 4.1.4.4. Applying New Names to Existing Formulas
          5. 4.1.4.5. Using Names with Different Types of Cell or Range References
          6. 4.1.4.6. Limitations of Using Names In Formulas
        5. 4.1.5. A1 AND R1C1 REFERENCE STYLES
          1. 4.1.5.1. Overview
          2. 4.1.5.2. How the Two Styles Work
        6. 4.1.6. USING COMMENTS IN CELLS
          1. 4.1.6.1. Overview
          2. 4.1.6.2. Working with Comments
        7. 4.1.7. DATA VALIDATION
          1. 4.1.7.1. Overview
          2. 4.1.7.2. Setting Up Simple Data Validation
          3. 4.1.7.3. Using Formulas to Create Data Validation Rules for a Cell
          4. 4.1.7.4. Using Formulas to Create Data Validation Rules for a Range
          5. 4.1.7.5. An Important Limitation of Data Validation
        8. 4.1.8. CONTROLS
          1. 4.1.8.1. Overview
          2. 4.1.8.2. Adding Controls
          3. 4.1.8.3. The Spinner
          4. 4.1.8.4. Adding a Spinner in Earlier Versions of Excel
        9. 4.1.9. CUSTOM NUMBER FORMATS
          1. 4.1.9.1. Overview
          2. 4.1.9.2. Creating Custom Formats
          3. 4.1.9.3. Two Useful Custom Number Formats
        10. 4.1.10. HIDING AND PROTECTING
          1. 4.1.10.1. Overview
          2. 4.1.10.2. Hiding a Workbook
          3. 4.1.10.3. Hiding Worksheets
          4. 4.1.10.4. Hiding and Unhiding Rows and Columns
          5. 4.1.10.5. Password-Protecting a Workbook
          6. 4.1.10.6. Protecting a Workbook's Structure
          7. 4.1.10.7. Protecting an Entire Worksheet
          8. 4.1.10.8. To Hide Formulas In Cells
          9. 4.1.10.9. Leaving Selected Cells Unprotected
        11. 4.1.11. CUSTOM VIEWS
          1. 4.1.11.1. Overview
          2. 4.1.11.2. Understanding Custom Views
          3. 4.1.11.3. Creating, Displaying, and Deleting a Custom View
          4. 4.1.11.4. Using a Custom View to Print Reports
        12. 4.1.12. ARRAYS AND ARRAY FORMULAS
          1. 4.1.12.1. Overview
          2. 4.1.12.2. A Note at Caution
          3. 4.1.12.3. Using Arrays In Built-in Function
          4. 4.1.12.4. Creating Array Formulas
          5. 4.1.12.5. Editing an Array Formula
          6. 4.1.12.6. Expanding and Contracting Array Formulas
          7. 4.1.12.7. Advantages and Disadvantages of Array Formulas
        13. 4.1.13. OUTLINE
    4. 5. Making Decisions and Looking Up Values
      1. 5.1. Logical Values
        1. 5.1.1.
          1. 5.1.1.1. Logical Values
      2. 5.2. Making Decisions
        1. 5.2.1.
          1. 5.2.1.1. The Comparison Operators
          2. 5.2.1.2. The IF Function
          3. 5.2.1.3. Nested IF Functions
          4. 5.2.1.4. The IFERROR Function
          5. 5.2.1.5. The AND and OR Functions
          6. 5.2.1.6. The MAX and MIN Functions
        2. 5.2.2. EXAMPLES OF CREATING DECISION-MAKING FORMULAS
          1. 5.2.2.1. Example 1: Calculating Income Tax, Version 1
          2. 5.2.2.2. Example 2: Calculating Income Tax, Version 2
          3. 5.2.2.3. Using Decision Trees to Represent Logic
          4. 5.2.2.4. Example 3: Calculating Income Tax, Version 3
          5. 5.2.2.5. Example 4: Calculating Income Tax, Version 4
          6. 5.2.2.6. Example 5: implementing Dividend Policy
          7. 5.2.2.7. Example 6: Determining the Rank of a Poker Hand
      3. 5.3. Looking Up Values
        1. 5.3.1. LOOKUP (Vector Form)
        2. 5.3.2. HLOOKUP, VLOOKUP
          1. 5.3.2.1. Example 7: Calculating Income Tax, Version 5
        3. 5.3.3. MATCH
        4. 5.3.4. CHOOSE
        5. 5.3.5. INDEX
        6. 5.3.6. OFFSET
          1. 5.3.6.1. Other Related Functions
      4. 5.4. Conditional Formatting
    5. 6. Analyzing Databases
      1. 6.1. THE MUTUAL FUND PORTFOLIO
        1. 6.1.1. THE MUTUAL FUND PORTFOLIO
      2. 6.2. Sorting
        1. 6.2.1. SORTING ON ONE FIELD
        2. 6.2.2. SORTING USING CUSTOM LISTS
        3. 6.2.3. MULTIPLE SORT
          1. 6.2.3.1. The Importance of the Sorting Order
          2. 6.2.3.2. Editing a Multiple Sort
      3. 6.3. Filtering
        1. 6.3.1. FILTERING ON A SINGLE COLUMN
        2. 6.3.2. FILTERING ON MULTIPLE COLUMNS
        3. 6.3.3. COMBINING FILTERING AND SORTING
      4. 6.4. Tables
        1. 6.4.1. CREATING A TABLE
          1. 6.4.1.1. Naming a Table
          2. 6.4.1.2. Printing a Table
          3. 6.4.1.3. Converting a Table back to a Range
        2. 6.4.2. WORKING WITH A TABLE
          1. 6.4.2.1. Keeping the Table Headers Visible
          2. 6.4.2.2. Selecting a Column or Row
          3. 6.4.2.3. Setting Table Style Options
          4. 6.4.2.4. Inserting a Column or Row
          5. 6.4.2.5. Deleting a Column or Row
        3. 6.4.3. ADDING AND USING A TOTAL ROW
        4. 6.4.4. REMOVING DUPLICATE DATA ROWS FROM A TARLE
        5. 6.4.5. SORTING AND FILTERING A TABLE
        6. 6.4.6. USING STRUCTURED REFERENCES WITH TABLES
          1. 6.4.6.1. Automatically Creating Table Formulas with Structured References
      5. 6.5. PivotTable
        1. 6.5.1. THE BASIC STRUCTURE OF A PIVOT TABLE
          1. 6.5.1.1. The Row Area
          2. 6.5.1.2. The Column Area
          3. 6.5.1.3. The Value Area
          4. 6.5.1.4. The Report Filter Area
        2. 6.5.2. CREATING A BASIC PIVOT TABLE
          1. 6.5.2.1. Starting Over
          2. 6.5.2.2. Moving Your Pivot Table
          3. 6.5.2.3. Refreshing Your Data
        3. 6.5.3. FORMATTING A PIVOT TABLE
          1. 6.5.3.1. Changing the Layout at a Pivot Table
          2. 6.5.3.2. Applying Styles to a Pivot Table
          3. 6.5.3.3. Formatting the Values in a Pivot Table
        4. 6.5.4. MODIFYING PIVOT TABLES
          1. 6.5.4.1. Rearranging a Pivot Table
          2. 6.5.4.2. Adding Layers to a Pivot Table
          3. 6.5.4.3. Adding Grand Totals and Subtotals to a Pivot Table
          4. 6.5.4.4. Showing Values in a Pivot Table in Different Ways
          5. 6.5.4.5. Summarizing Data in a Pivot Table in Different Ways
        5. 6.5.5. GROUPING FIELDS
          1. 6.5.5.1. Grouping Date Fields
          2. 6.5.5.2. Grouping Numeric Fields
          3. 6.5.5.3. Grouping Text Fields
        6. 6.5.6. SORTING AND FILTERING PIVOT TABLES
          1. 6.5.6.1. Sorting
          2. 6.5.6.2. Filtering
        7. 6.5.7. OTHER FEATURES OF PIVOTTABLE
    6. 7. Answering What-If Questions
      1. 7.1. Independent and Dependent Variables
        1. 7.1.1.
          1. 7.1.1.1. Independent and Dependent Variables
      2. 7.2. Data Tables
        1. 7.2.1.
          1. 7.2.1.1. Overview
          2. 7.2.1.2. Creating a One-Input Data Table
          3. 7.2.1.3. Creating a Two-Input Data Table
          4. 7.2.1.4. Data Tables Are Dynamic
          5. 7.2.1.5. An Important Restriction
          6. 7.2.1.6. Using Data Tables to Create Charts
      3. 7.3. Scenario Manager
        1. 7.3.1.
          1. 7.3.1.1. Overview
          2. 7.3.1.2. What is a Scenario?
          3. 7.3.1.3. Using the Scenario Manager
          4. 7.3.1.4. An Important Restriction
    7. 8. Finding Iterative Solutions
      1. 8.1. CIRCULAR REFERENCE
        1. 8.1.1. CIRCULAR REFERENCE
          1. 8.1.1.1. Overview
          2. 8.1.1.2. Unintentional Circular Reference
          3. 8.1.1.3. Using Circular Reference Intentionally
          4. 8.1.1.4. How to Set Up a Circular Reference
          5. 8.1.1.5. Controlling the Accuracy of Your Answer
          6. 8.1.1.6. Circular Reference in Larger Models
        2. 8.1.2. GOAL SEEK
          1. 8.1.2.1. Overview
          2. 8.1.2.2. Using Goal Seek
          3. 8.1.2.3. Some Limitations of Goal Seek
        3. 8.1.3. SOLVER
          1. 8.1.3.1. A Few Cautionary Notes
          2. 8.1.3.2. Installing and Accessing Solver
          3. 8.1.3.3. A Solver Example
          4. 8.1.3.4. The Solver Options Dialog Box
    8. 9. Doing Statistical Analysis
      1. 9.1. The S&P 500 Monthly Return Data
        1. 9.1.1.
          1. 9.1.1.1. The S&P 500 Monthly Return Data
        2. 9.1.2. DESCRIPTIVE STATISTICS
          1. 9.1.2.1. The Descriptive Statistics Tool
          2. 9.1.2.2. AVERAGE
          3. 9.1.2.3. AVERAGEA
          4. 9.1.2.4. TRIMMEAN
          5. 9.1.2.5. GEOMEAN
          6. 9.1.2.6. HARMEAN
          7. 9.1.2.7. MEDIAN
          8. 9.1.2.8. MODE
          9. 9.1.2.9. STDEV
          10. 9.1.2.10. STDEVA
          11. 9.1.2.11. STDEVP
          12. 9.1.2.12. STDEVPA
          13. 9.1.2.13. VAR
          14. 9.1.2.14. VARA
          15. 9.1.2.15. VARP
          16. 9.1.2.16. VARPA
          17. 9.1.2.17. AVEDEV
          18. 9.1.2.18. DEVSQ
          19. 9.1.2.19. SKEW
          20. 9.1.2.20. KURT
        3. 9.1.3. FREQUENCY DISTRIBUTIONS AND HISTOGRAMS
          1. 9.1.3.1. FREQUENCY
          2. 9.1.3.2. The Histogram Tool
        4. 9.1.4. COUNTING, RANKING, AND CALCULATING QUANTILES
          1. 9.1.4.1. COUNT
          2. 9.1.4.2. COUNTA
          3. 9.1.4.3. COUNTBLANK
          4. 9.1.4.4. COUNTIF
          5. 9.1.4.5. SUMIF
          6. 9.1.4.6. AVERAGEIF
          7. 9.1.4.7. COUNTIFS, SUMIFS, and AVERAGEIFS
          8. 9.1.4.8. LARGE
          9. 9.1.4.9. SMALL
          10. 9.1.4.10. MAX
          11. 9.1.4.11. MAXA
          12. 9.1.4.12. MIN
          13. 9.1.4.13. MINA
          14. 9.1.4.14. PERCENTILE
          15. 9.1.4.15. PERCENTRANK
          16. 9.1.4.16. QUARTILE
          17. 9.1.4.17. RANK
          18. 9.1.4.18. The Rank and Percentile Tool
        5. 9.1.5. NORMAL PROBABILITY DISTRIBUTIONS
          1. 9.1.5.1. NORMDIST
          2. 9.1.5.2. NORMINV
          3. 9.1.5.3. NORMSDIST
          4. 9.1.5.4. NORMSINV
          5. 9.1.5.5. STANDARDIZE
          6. 9.1.5.6. RANDOM NUMBERS
          7. 9.1.5.7. RAND
          8. 9.1.5.8. RANDBETWEEN
          9. 9.1.5.9. The Random Number Generation Tool
          10. 9.1.5.10. Linear Regression and Related Statistics
          11. 9.1.5.11. LINEST
          12. 9.1.5.12. The Regression Tool
          13. 9.1.5.13. SLOPE
          14. 9.1.5.14. INTERCEPT
          15. 9.1.5.15. FORECAST
          16. 9.1.5.16. TREND
          17. 9.1.5.17. CORREL
          18. 9.1.5.18. The Correlation Tool
          19. 9.1.5.19. COVAR
          20. 9.1.5.20. The Covariance Tool
        6. 9.1.6. STATISTICAL TESTS
          1. 9.1.6.1. TINV
          2. 9.1.6.2. TDIST
          3. 9.1.6.3. TTEST
          4. 9.1.6.4. Tools to Perform student's T-tests
          5. 9.1.6.5. FTE8T
          6. 9.1.6.6. FDIST
          7. 9.1.6.7. FINV
          8. 9.1.6.8. The F-Test Two-Sample for Variance Tool
    9. 10. Using the Financial Functions
      1. 10.1. ANNUITY FUNCTIONS
        1. 10.1.1. ANNUITY FUNCTIONS
          1. 10.1.1.1. PV
          2. 10.1.1.2. FV
          3. 10.1.1.3. PMT
          4. 10.1.1.4. NPER
          5. 10.1.1.5. RATE
          6. 10.1.1.6. IPMT
          7. 10.1.1.7. PPMT
          8. 10.1.1.8. CUMIPMT
          9. 10.1.1.9. CUMPRINC
          10. 10.1.1.10. EFFECT
          11. 10.1.1.11. NOMINAL
        2. 10.1.2. INVESTMENT ANALYSIS FUNCTIONS
          1. 10.1.2.1. NPV
          2. 10.1.2.2. IRR
          3. 10.1.2.3. MIRR
          4. 10.1.2.4. XNPV
          5. 10.1.2.5. XIRR
          6. 10.1.2.6. FVSCHEDULE
        3. 10.1.3. BOND FUNCTIONS
          1. 10.1.3.1. PRICE
          2. 10.1.3.2. VIELD
          3. 10.1.3.3. PRICEMAT
          4. 10.1.3.4. YIELDMAT
          5. 10.1.3.5. DURATION
          6. 10.1.3.6. MDURATION
          7. 10.1.3.7. Functions for Treasury Bills
          8. 10.1.3.8. Functions for Other Price and Yield Calculations
          9. 10.1.3.9. Functions for Coupon Dates Calculations
          10. 10.1.3.10. Functions to Convert Dollar Pricing
        4. 10.1.4. DEPRECIATION FUNCTIONS
          1. 10.1.4.1. SLN
          2. 10.1.4.2. DB
          3. 10.1.4.3. DDB
          4. 10.1.4.4. SYD
          5. 10.1.4.5. VDB
    10. 11. Other Useful Excel Functions
      1. 11.1. Mathematical Functions
        1. 11.1.1. TRUNCATING AND ROUNDING NUMBERS
          1. 11.1.1.1. ROUND
          2. 11.1.1.2. ROUNDUP
          3. 11.1.1.3. ROUMDDOWN
        2. 11.1.2. MROUND
          1. 11.1.2.1. EVEN
          2. 11.1.2.2. ODD
          3. 11.1.2.3. CEILING
          4. 11.1.2.4. FLOOR
          5. 11.1.2.5. INT
          6. 11.1.2.6. TRUNC
        3. 11.1.3. LOGARITHMS
          1. 11.1.3.1. LN
          2. 11.1.3.2. LOG
          3. 11.1.3.3. L0G10
        4. 11.1.4. OTHER MATHEMATICAL FUNCTIONS
          1. 11.1.4.1. ABS
          2. 11.1.4.2. COMBIN
          3. 11.1.4.3. EXP
          4. 11.1.4.4. FACT
          5. 11.1.4.5. MOD
          6. 11.1.4.6. PI
          7. 11.1.4.7. POWER
          8. 11.1.4.8. PRODUCT
          9. 11.1.4.9. QUOTIENT
          10. 11.1.4.10. RAND, RANDDETWEEN
          11. 11.1.4.11. SIGN
          12. 11.1.4.12. SQRT
          13. 11.1.4.13. SUM
          14. 11.1.4.14. SUMSQ
      2. 11.2. Date and Time Functions
        1. 11.2.1.
          1. 11.2.1.1. DATE
          2. 11.2.1.2. TIME
          3. 11.2.1.3. DATEVALUE
          4. 11.2.1.4. TIMEVALUE
          5. 11.2.1.5. DAY
          6. 11.2.1.6. WEEKDAY
          7. 11.2.1.7. MONTH
          8. 11.2.1.8. YEAR
          9. 11.2.1.9. HOUR
          10. 11.2.1.10. MINUTE
          11. 11.2.1.11. SECOND
          12. 11.2.1.12. DAYS360
          13. 11.2.1.13. NOW
          14. 11.2.1.14. TODAY
          15. 11.2.1.15. EDATE
          16. 11.2.1.16. WORKDAY
          17. 11.2.1.17. NETWORKDAYS
          18. 11.2.1.18. EOMONTH
          19. 11.2.1.19. WEEKNUM
          20. 11.2.1.20. YEARFRAC
      3. 11.3. Text Functions
        1. 11.3.1.
          1. 11.3.1.1. CONCATENATE
          2. 11.3.1.2. EXACT
          3. 11.3.1.3. FIND
          4. 11.3.1.4. SEARCH
          5. 11.3.1.5. REPLACE
          6. 11.3.1.6. SUBSTITUTE
          7. 11.3.1.7. TRIM
          8. 11.3.1.8. LEFT
          9. 11.3.1.9. RIGHT
          10. 11.3.1.10. MID
          11. 11.3.1.11. LEN
          12. 11.3.1.12. LOWER
          13. 11.3.1.13. UPPER
          14. 11.3.1.14. PROPER
          15. 11.3.1.15. FIXED
          16. 11.3.1.16. VALUE
          17. 11.3.1.17. TEXT
          18. 11.3.1.18. REPT
          19. 11.3.1.19. CLEAN
      4. 11.4. Information Functions
        1. 11.4.1.
          1. 11.4.1.1. CELL
          2. 11.4.1.2. Functions to Determine Type of Data
  5. 2. Financial Modeling Using Excel
    1. 12. Building Good Excel Models and Debugging Them
      1. 12.1. Attributes of Good Excel Models
        1. 12.1.1.
          1. 12.1.1.1. Realistic
          2. 12.1.1.2. Error-Free
          3. 12.1.1.3. Flexible
          4. 12.1.1.4. Easy to Use
          5. 12.1.1.5. Easily Understandable Formulas
          6. 12.1.1.6. Judicious Formatting
          7. 12.1.1.7. Appropriate Numbers Formatting
          8. 12.1.1.8. Minimum Hard Coding
          9. 12.1.1.9. Well Organized and Easy to Follow
          10. 12.1.1.10. Good Output Production
          11. 12.1.1.11. Good Documentation
          12. 12.1.1.12. Data Validations
      2. 12.2. Documenting Excel Models
        1. 12.2.1. COMMON WAYS TO DOCUMENT YOUR EXCEL MODEL
          1. 12.2.1.1. Assumptions, Inputs and Outputs
          2. 12.2.1.2. Cell Comments
          3. 12.2.1.3. Model Description
          4. 12.2.1.4. Version Description
          5. 12.2.1.5. Other Documentation
      3. 12.3. Debugging Excel Models
        1. 12.3.1. ERRORS EXCEL MAY FIND FOR YOU
          1. 12.3.1.1. Syntax Errors in Formulas
          2. 12.3.1.2. Formulas That Produce Error Values
          3. 12.3.1.3. Spelling Mistakes
        2. 12.3.2. ERRORS YOU WILL HAVE TO FIND YOURSELF
          1. 12.3.2.1. Errors in the Financial and Mathematical Aspects of the Problem
          2. 12.3.2.2. Errors In Translating the Solution Into a Model
          3. 12.3.2.3. Circular Reference
          4. 12.3.2.4. Using Wrong Names or Cell Addresses in Formulas
      4. 12.4. Using Formula Auditing Tools for Debugging
        1. 12.4.1.
          1. 12.4.1.1. Zoom
          2. 12.4.1.2. Go To Special
        2. 12.4.2. THE FORMULA AUDITING TOOLS
          1. 12.4.2.1. Using the Formula Auditing Tools
      5. 12.5. Learning Modeling Using Excel
        1. 12.5.1. THE FOUR LEARNING TRACKS
          1. 12.5.1.1. Learning Track 1 (Most Challenging)
          2. 12.5.1.2. Learning Track 2
          3. 12.5.1.3. Learning Track 3
          4. 12.5.1.4. Learning Track 4 (Least Challenging)
    2. 13. Financial Statements Forecasting
      1. 13.1. Review of Theory and Concepts
        1. 13.1.1. STEP 1: UNDERSTAND THE EXPECTED USES OF THE MODEL
        2. 13.1.2. STEP 2: COLLECT HISTORICAL DATA
        3. 13.1.3. STEP 3: UNDERSTAND THE COMPANY'S PLANS AND DEVELOP A COMPREHENSIVE SET OF MODELING ASSUMPTIONS
          1. 13.1.3.1. Forecasting Line Items
          2. 13.1.3.2. The "Plug"
        4. 13.1.4. STEP 4: BUILD THE MODEL AND DEBUG IT
          1. 13.1.4.1. Depreciation
          2. 13.1.4.2. Retained Earnings
          3. 13.1.4.3. Interest Expense
          4. 13.1.4.4. Sign Convention and Formatting of Financial Statements
        5. 13.1.5. STEP 5: IMPROVE THE MODEL BASED ON FEEDBACK
        6. 13.1.6. THE LEVEL OF DETAIL IN A MODEL
        7. 13.1.7. THE STATEMENT OF CASH FLOWS
          1. 13.1.7.1. The Three Categories of Cash Flaws
          2. 13.1.7.2. Modeling the Statement of Cash Flows
          3. 13.1.7.3. FREE CASH FLOW
          4. 13.1.7.4. NOPAT
          5. 13.1.7.5. Gross Cash Flow
          6. 13.1.7.6. Various Investments
          7. 13.1.7.7. Uses of the Free Cash Flow
          8. 13.1.7.8. Free Cash Flow and Business Valuation
      2. 13.2. Modeling Examples
        1. 13.2.1. MODEL 1: HISTORICAL FINANCIAL STATEMENTS
          1. 13.2.1.1. The Problem
          2. 13.2.1.2. Modeling Strategy
          3. 13.2.1.3. Building the Model
          4. 13.2.1.4. Testing the Model
          5. 13.2.1.5. Uses of the Model
        2. 13.2.2. MODEL 2: COMMON SIZE STATEMENTS
          1. 13.2.2.1. The Problem
          2. 13.2.2.2. Modeling Strategy
          3. 13.2.2.3. Building the Model
          4. 13.2.2.4. Testing the Model
          5. 13.2.2.5. Uses of the Model
        3. 13.2.3. MODEL 3: FINANCIAL INDICATORS
          1. 13.2.3.1. The Problem
          2. 13.2.3.2. Modeling Strategy
          3. 13.2.3.3. Building the Model
          4. 13.2.3.4. Testing the Model
          5. 13.2.3.5. Uses of the Model
        4. 13.2.4. MODEL 4: FINANCIAL STATEMENT FORECASTING WITH UNBALANCED BALANCE SHEET
          1. 13.2.4.1. The Problem
          2. 13.2.4.2. Modeling Strategy
          3. 13.2.4.3. Building the Model
          4. 13.2.4.4. Testing the Model
          5. 13.2.4.5. Uses of the Model
        5. 13.2.5. MODEL 5: FINANCIAL STATEMENT FORECASTING, VERSION 1
          1. 13.2.5.1. The Problem
          2. 13.2.5.2. Modeling Strategy
          3. 13.2.5.3. Building the Model
          4. 13.2.5.4. Testing the Model
          5. 13.2.5.5. Uses of the Model
        6. 13.2.6. MODEL 6: FINANCIAL STATEMENT FORECASTING, VERSION 2
          1. 13.2.6.1. The Problem
          2. 13.2.6.2. Modeling Strategy
          3. 13.2.6.3. Binding the Model
          4. 13.2.6.4. Discussion of the Results
        7. 13.2.7. MODEL 7: FINANCIAL STATEMENT FORECASTING, VERSION 3
          1. 13.2.7.1. The Problem
          2. 13.2.7.2. Modeling Strategy
          3. 13.2.7.3. Building the Model
          4. 13.2.7.4. Tasting the Model
          5. 13.2.7.5. Uses of the Model
        8. 13.2.8. MODEL 8: FINANCIAL STATEMENT FORECASTING, VERSION 4
          1. 13.2.8.1. The Problem
          2. 13.2.8.2. Modeling Strategy
          3. 13.2.8.3. Building the Model
          4. 13.2.8.4. Testing the Model
          5. 13.2.8.5. Uses of the Model
        9. 13.2.9. MODEL 9: FINANCIAL STATEMENT FORECASTING, VERSION 5
          1. 13.2.9.1. The Problem
          2. 13.2.9.2. Modeling Strategy
          3. 13.2.9.3. Building the Model
          4. 13.2.9.4. Testing the Model
          5. 13.2.9.5. Uses of the Model
        10. 13.2.10. MODEL 10: FINANCIAL STATEMENT FORECASTING, VERSION
          1. 13.2.10.1. The Problem
          2. 13.2.10.2. Modeling Strategy
          3. 13.2.10.3. Building the Model
          4. 13.2.10.4. Testing the Model
          5. 13.2.10.5. Uses of the Model
        11. 13.2.11. MODEL 11: FINANCIAL STATEMENT FORECASTING, VERSION 7
          1. 13.2.11.1. The Problem
          2. 13.2.11.2. Modeling Strategy
          3. 13.2.11.3. Building the Model
          4. 13.2.11.4. Testing the Model
          5. 13.2.11.5. Uses of the Model
        12. 13.2.12. MODEL 12: FINANCIAL STATEMENTS SENSITIVITY ANALYSIS
          1. 13.2.12.1. The Problem
          2. 13.2.12.2. Modeling Strategy
          3. 13.2.12.3. Building the Model
          4. 13.2.12.4. Testing the Model
          5. 13.2.12.5. Uses of the Model
        13. 13.2.13. MODEL 13: FINANCIAL STATEMENTS SCENARIO ANALYSIS
          1. 13.2.13.1. The Problem
          2. 13.2.13.2. Modeling Strategy
          3. 13.2.13.3. Building the Model
          4. 13.2.13.4. Testing the Model
          5. 13.2.13.5. Uses at the Model
        14. 13.2.14. MODEL 14: CALCULATING FREE CASH FLOW
          1. 13.2.14.1. The Problem
          2. 13.2.14.2. Modeling Strategy
          3. 13.2.14.3. Building the Model
          4. 13.2.14.4. Testing the Model
          5. 13.2.14.5. Uses of the Model
    3. 14. Time Value of Money
      1. 14.1. Review of Theory and Concepts
        1. 14.1.1. PRESENT AND FUTURE VALUES
          1. 14.1.1.1. The Importance of Using Timelines
          2. 14.1.1.2. Frequency of Compounding and Effective Rates
          3. 14.1.1.3. Reinvestment Risk
          4. 14.1.1.4. Inflation and the Real Rate of Return
        2. 14.1.2. INVESTMENT AND PROJECT EVALUATION
          1. 14.1.2.1. Net Present Value (NPV)
          2. 14.1.2.2. Internal Rate of Return (IRR)
        3. 14.1.3. CONSTANT ANNUITIES
          1. 14.1.3.1. Constant Annuities in Appears
          2. 14.1.3.2. Constant Annuities In Advance
          3. 14.1.3.3. The System of Four Variables for Constant Annuities
        4. 14.1.4. GROWING ANNUITIES
          1. 14.1.4.1. Growing Annuities in Arrears
          2. 14.1.4.2. Growing Annuities In Advance
          3. 14.1.4.3. The System of Five Variables for Growing Annuities
      2. 14.2. Modeling Examples
        1. 14.2.1. MODEL 1: EFFECT OF COMPOUNDING FREQUENCY
          1. 14.2.1.1. The Problem
          2. 14.2.1.2. Modeling Strategy
          3. 14.2.1.3. Building the Model
          4. 14.2.1.4. Testing the Model
          5. 14.2.1.5. Uses of the Model
        2. 14.2.2. MODEL 2: CONSTANT ANNUITIES
          1. 14.2.2.1. The Problem
          2. 14.2.2.2. Modeling Strategy
          3. 14.2.2.3. Building the Model
          4. 14.2.2.4. Testing the Model
          5. 14.2.2.5. Uses of the Model
          6. 14.2.2.6. Limitations of the Model
        3. 14.2.3. MODEL S: GROWING ANNUITIES
          1. 14.2.3.1. The Problem
          2. 14.2.3.2. Modeling Strategy
          3. 14.2.3.3. Building the Model
          4. 14.2.3.4. Tasting the Model
          5. 14.2.3.5. Uses of the Model
          6. 14.2.3.6. Limitations of the Model
        4. 14.2.4. MODEL 4: LOAN AMORTIZATION TABLE, VERSION 1
          1. 14.2.4.1. The Problem
          2. 14.2.4.2. Modeling Strategy
          3. 14.2.4.3. Building the Model
          4. 14.2.4.4. Testing the Model
          5. 14.2.4.5. Uses of the Model
          6. 14.2.4.6. Limitations of the Model
        5. 14.2.5. MODEL 5: LOAN AMORTIZATION TABLE, VERSION 2
          1. 14.2.5.1. The Problem
          2. 14.2.5.2. Modeling Strategy
          3. 14.2.5.3. Building the Model
          4. 14.2.5.4. Testing the Model
          5. 14.2.5.5. Uses of the Model
          6. 14.2.5.6. Limitations of the Model
        6. 14.2.6. MODEL 6: LOAM AMORTIZATION TABLE FOR CHANGING INTEREST RATE
          1. 14.2.6.1. The Problem
          2. 14.2.6.2. Modeling Strategy
          3. 14.2.6.3. Building the Model
          4. 14.2.6.4. Testing the Model
          5. 14.2.6.5. Uses of the Model
          6. 14.2.6.6. Limitations of the Model
        7. 14.2.7. MODEL 7: LOAN AMORTIZATION TABLE FOR CHANGING ANNOAL PAYMENT
          1. 14.2.7.1. The Problem
          2. 14.2.7.2. Modeling Strategy
          3. 14.2.7.3. Building the Model
          4. 14.2.7.4. Testing the Model
          5. 14.2.7.5. Uses of the Model
        8. 14.2.8. MODEL 8: THE CONDOMINIUM PROJECT
          1. 14.2.8.1. The Problem
          2. 14.2.8.2. Modeling Strategy
          3. 14.2.8.3. Building the Model
          4. 14.2.8.4. Testing the Model
          5. 14.2.8.5. Two Important Points
    4. 15. Financial Planning and Investments
      1. 15.1. Review of Theory and Concepts
        1. 15.1.1. SOME BASIC ISSUES
          1. 15.1.1.1. Inflation
          2. 15.1.1.2. Taxes
          3. 15.1.1.3. Tax Baals and Calculating Taxes on Sales over Time
          4. 15.1.1.4. Reinvestment Income
          5. 15.1.1.5. Taxable versus Tax-Deferred Accounts
        2. 15.1.2. SAVING AND INVESTING FOR RETIREMENT
          1. 15.1.2.1. Real Dollar Retirement Planning
          2. 15.1.2.2. Nominal Dollar Retirement Planning
        3. 15.1.3. STRUCTURING PORTFOLIOS
      2. 15.2. Modeling Examples
        1. 15.2.1. MODEL 1: RETURN WITH CHANGING REINVESTMENT RATES
          1. 15.2.1.1. The Problem
          2. 15.2.1.2. Modeling Strategy
          3. 15.2.1.3. Building the Model
          4. 15.2.1.4. Testing the Model
          5. 15.2.1.5. Uses of the Model
          6. 15.2.1.6. Limitations of the Model
        2. 15.2.2. MODEL 2: SAVING FOR RETIREMENT
          1. 15.2.2.1. The Problem
          2. 15.2.2.2. Modeling Strategy
          3. 15.2.2.3. Building the Model
          4. 15.2.2.4. Testing the Model
          5. 15.2.2.5. Uses of the Model
          6. 15.2.2.6. Limitations of the Model
        3. 15.2.3. MODEL 3: RETIREMEMT PLANNINS IN REAL DOLLARS
          1. 15.2.3.1. The Problem
          2. 15.2.3.2. Modeling Strategy
          3. 15.2.3.3. Building the Model
          4. 15.2.3.4. Testing the Model
          5. 15.2.3.5. Uses of the Model
        4. 15.2.4. MODEL 4: RETIREMENT PLANNING IN NOMINAL DOLLARS
          1. 15.2.4.1. The Problem
          2. 15.2.4.2. Modeling Strategy
          3. 15.2.4.3. Building the Model
          4. 15.2.4.4. Testing the Model
          5. 15.2.4.5. Uses of the Model
        5. 15.2.5. MODEL 5: PORTFOLIO STROCTORING
          1. 15.2.5.1. The Problem
          2. 15.2.5.2. Modeling Strategy
          3. 15.2.5.3. Building the Model
          4. 15.2.5.4. Testing the Model
          5. 15.2.5.5. Uses of the Model
          6. 15.2.5.6. Limitation of the Model
    5. 16. Analyzing Market History
      1. 16.1. Review of Theory and Concepts
        1. 16.1.1. INDEXES
        2. 16.1.2. MEASURING RETURNS
          1. 16.1.2.1. Total Return
          2. 16.1.2.2. Total Return versus IRR
          3. 16.1.2.3. Real versus Nominal Returns
          4. 16.1.2.4. Cumulative and Annualized Returns
          5. 16.1.2.5. Growth of $1
          6. 16.1.2.6. Roiling Period Returns
          7. 16.1.2.7. RISK
      2. 16.2. Modeling Examples
        1. 16.2.1. MODEL 1: CALCULATING TOTAL RETURNS
          1. 16.2.1.1. The Problem
          2. 16.2.1.2. Modeling Strategy
          3. 16.2.1.3. Building the Model
          4. 16.2.1.4. Testing the Model
          5. 16.2.1.5. Uses of the Model
          6. 16.2.1.6. Limitations of the Model
        2. 16.2.2. MODEL 2: COMPARING RETURNS ON SEVERAL ASSETS
          1. 16.2.2.1. The Problem
          2. 16.2.2.2. Modeling Strategy
          3. 16.2.2.3. Building the Model
          4. 16.2.2.4. Testing the Model
          5. 16.2.2.5. Uses of the Model
          6. 16.2.2.6. Limitations of the Model
        3. 16.2.3. M00EL 3: COMPARING NOMINAL AND REAL GROWTH OF INVESTMENT
          1. 16.2.3.1. The Problem
          2. 16.2.3.2. Modeling Strategy
          3. 16.2.3.3. Building the Model
          4. 16.2.3.4. Testing the Model
          5. 16.2.3.5. Uses of the Model
          6. 16.2.3.6. Limitations of the Model
        4. 16.2.4. MODEL 4: COMPARING ROLLING PERIOD RETURN
          1. 16.2.4.1. The Problem
          2. 16.2.4.2. Modeling Strategy
          3. 16.2.4.3. Building the Model
          4. 16.2.4.4. Testing the Model
          5. 16.2.4.5. Uses of the Model
    6. 17. Bond Pricing and Duration
      1. 17.1. Review of Theory and Concepts
        1. 17.1.1. KEY CHARACTERISTICS OF BONDS
          1. 17.1.1.1. Par Value
          2. 17.1.1.2. Coupon Interest Rate
          3. 17.1.1.3. Maturity Date
          4. 17.1.1.4. Call Provision
          5. 17.1.1.5. Credit Risk
        2. 17.1.2. BOND VALUATION
          1. 17.1.2.1. The System of Five Bond Variables
          2. 17.1.2.2. EAR versus APR
          3. 17.1.2.3. Current Yield
          4. 17.1.2.4. Yield to Maturity
          5. 17.1.2.5. Yield to Call
        3. 17.1.3. RISKS OF BOND INVESTING
          1. 17.1.3.1. Interest Rate Risk
          2. 17.1.3.2. Reinvestment Risk
          3. 17.1.3.3. Credit Risk
        4. 17.1.4. BOND DURATION
          1. 17.1.4.1. Macauley Duration
          2. 17.1.4.2. Modified Duration
        5. 17.1.5. THE YIELD CURVE AND FORWARD RATES
          1. 17.1.5.1. Yield Curve
          2. 17.1.5.2. Forward Rates
          3. 17.1.5.3. Bond Pricing Using the Yield Curve
      2. 17.2. Modeling Examples
        1. 17.2.1. MODEL 1: YIELD CURVE AND FORWARD RATES
          1. 17.2.1.1. The Problem
          2. 17.2.1.2. Modeling Strategy
          3. 17.2.1.3. Building the Model
          4. 17.2.1.4. Testing the Model
          5. 17.2.1.5. Uses of the Model
        2. 17.2.2. MODEL 2: BOND PRICING DSIN6 YIELD TO MATURITY
          1. 17.2.2.1. The Problem
        3. 17.2.3. Modeling Strategy
          1. 17.2.3.1. Building the Model
          2. 17.2.3.2. Testing the Model
          3. 17.2.3.3. Uses of the Model
        4. 17.2.4. MODEL 3: BOND PRICING OSING THE YIELD CURVE
          1. 17.2.4.1. The Problem
          2. 17.2.4.2. Modeling Strategy
          3. 17.2.4.3. Bonding the Model
          4. 17.2.4.4. Testing the Model
          5. 17.2.4.5. Uses of the Model
        5. 17.2.5. MODEL 4: BOND DDRATION AND ITS DEPENDENCE ON YIELD TO MATURITY
          1. 17.2.5.1. The Problem
          2. 17.2.5.2. Modeling Strategy
          3. 17.2.5.3. Building the Model
          4. 17.2.5.4. Testing the Model
          5. 17.2.5.5. Uses of the Model
        6. 17.2.6. MODEL 5: DEPENDENCE OF BOND DURATION OBI REMAINING LIFE
          1. 17.2.6.1. The Problem
          2. 17.2.6.2. Modeling Strategy
          3. 17.2.6.3. Building the Model
          4. 17.2.6.4. Testing the Model
          5. 17.2.6.5. Uses of the Model
    7. 18. Simulating Stock Prices
      1. 18.1. Review of Theory and Concepts
        1. 18.1.1.
          1. 18.1.1.1. Simulation
          2. 18.1.1.2. A Simple Model for Stock Prices
          3. 18.1.1.3. The Geometric Brownian Motion Model
          4. 18.1.1.4. Proportional Returns on Stacks Are Normally Distributed
          5. 18.1.1.5. Stock Prices Are Lognormally Distributed
          6. 18.1.1.6. The Continuously Compounded Rate of Return Is Normally Distributed
          7. 18.1.1.7. The Two Expected Returns
          8. 18.1.1.8. Estimating Volatility
        2. 18.1.2. GENERATING RANDOM NUMBERS
      2. 18.2. Modeling Examples
        1. 18.2.1. MODEL 1: ESTIMATING A STOCK'S VOLATILITY, VERSION 1
          1. 18.2.1.1. The Problem
          2. 18.2.1.2. Modeling Strategy
          3. 18.2.1.3. Building the Model
          4. 18.2.1.4. Testing the Model
          5. 18.2.1.5. Uses of the Model
          6. 18.2.1.6. Limitations of the Model
        2. 18.2.2. MODEL 2: ESTIMATING A STOCK'S VOLATILITY, VERSION 2
          1. 18.2.2.1. The Problem
          2. 18.2.2.2. Modeling Strategy
          3. 18.2.2.3. Building the Model
          4. 18.2.2.4. Testing the Model
        3. 18.2.3. MODEL 3: SIMULATING STOCK PRICES
          1. 18.2.3.1. The Problem
          2. 18.2.3.2. Modeling Strategy
          3. 18.2.3.3. Building the Model
          4. 18.2.3.4. Testing the Model
          5. 18.2.3.5. Uses of the Model
          6. 18.2.3.6. Limitations of the Model
        4. 18.2.4. MODEL 4: LOGNORMAL DISTRIBUTION OF STOCK PRICES
          1. 18.2.4.1. The Problem
          2. 18.2.4.2. Modeling Strategy
          3. 18.2.4.3. Building the Model
          4. 18.2.4.4. Testing the Models
          5. 18.2.4.5. Uses of the Model
    8. 19. Options and Option Portfolios
      1. 19.1. Review of Theory and Concepts
        1. 19.1.1. OPTION BASICS AND TERMINOLOGY
        2. 19.1.2. PAYOFFS OF OPTIONS AI EXPIRATION
          1. 19.1.2.1. THE BLACK-SCrlOLES-MERTON EQUATION FOB OPTION VALUATION
          2. 19.1.2.2. An Apparent Puzzle
          3. 19.1.2.3. Put-Call Parity
          4. 19.1.2.4. Implied Volatility
          5. 19.1.2.5. The Effect of Dividends
        3. 19.1.3. THE GREEK LETTERS
          1. 19.1.3.1. Delta
          2. 19.1.3.2. Theta
          3. 19.1.3.3. Gamma
          4. 19.1.3.4. Vega
          5. 19.1.3.5. Rho
          6. 19.1.3.6. Option Leverage
        4. 19.1.4. VALUING AMERICAN OPTIONS
        5. 19.1.5. OPTION ON OTHER ASSETS
        6. 19.1.6. OPTION PORTFOLIOS
      2. 19.2. Modeling Examples
        1. 19.2.1. MODEL 1: OPTION PAYOFFS AT EXPIRATION
          1. 19.2.1.1. The Problem
          2. 19.2.1.2. Modeling Strategy
          3. 19.2.1.3. Building the Model
          4. 19.2.1.4. Testing the Model
        2. 19.2.2. MODEL 2: PROFIT OF OPTION PORTFOLIOS AT EXPIRATION
          1. 19.2.2.1. The Problem
          2. 19.2.2.2. Modeling Strategy
          3. 19.2.2.3. Building the Model
          4. 19.2.2.4. Testing the Model
          5. 19.2.2.5. Uses of the Model
          6. 19.2.2.6. Limitations of the Model
        3. 19.2.3. MODEL 3: PROFIT OF OPTION PORTFOLIOS AT EXPIRATION (USING ARRAY FORMULAS)
          1. 19.2.3.1. The Problem
          2. 19.2.3.2. Modeling Strategy
          3. 19.2.3.3. Building the Model
          4. 19.2.3.4. Testing the Model
          5. 19.2.3.5. Limitations of the Model
        4. 19.2.4. MODEL 4: BSM MODEL AND THE GREEK LETTERS
          1. 19.2.4.1. The Problem
          2. 19.2.4.2. Modeling Strategy
          3. 19.2.4.3. Building the Model
          4. 19.2.4.4. Testing the Model
          5. 19.2.4.5. Uses of the Model
          6. 19.2.4.6. Limitations of the Model
          7. 19.2.4.7. Estimating Implied Volatility
        5. 19.2.5. MODEL 5: VARIATION OF OPTION PRICE WITH STOCK PRICE
          1. 19.2.5.1. The Problem
          2. 19.2.5.2. Modeling Strategy
          3. 19.2.5.3. Building the Model
          4. 19.2.5.4. Testing the Model
          5. 19.2.5.5. Uses of the Model
          6. 19.2.5.6. Limitations of the Model
        6. 19.2.6. MODEL 6: VARIATION OF OPTION PRICE WITH VOLATILITY
          1. 19.2.6.1. The Problem
          2. 19.2.6.2. Modeling Strategy
          3. 19.2.6.3. Building the Model
          4. 19.2.6.4. Testing the Model
          5. 19.2.6.5. Using the Model to Calculate Implied Volatility
          6. 19.2.6.6. Other Uses of the Model
        7. 19.2.7. MODEL 7: VARIATION OF DELTA WITH TIME TO EXPIRATION
          1. 19.2.7.1. The Problem
          2. 19.2.7.2. Modeling Strategy
          3. 19.2.7.3. Building the Model
          4. 19.2.7.4. Testing the Model
          5. 19.2.7.5. Uses of the Model
        8. 19.2.8. MODEL 8: LEVERAGE OF OPTIONS
          1. 19.2.8.1. The Problem
          2. 19.2.8.2. Modeling Strategy
          3. 19.2.8.3. Building the Model
          4. 19.2.8.4. Testing the Model
          5. 19.2.8.5. Uses of the Model
        9. 19.2.9. MODEL 9: PROFIT OF OPTIONS PORTFOLIO AT ANY TIME
          1. 19.2.9.1. The Problem
          2. 19.2.9.2. Modeling Strategy
          3. 19.2.9.3. Building the Model
          4. 19.2.9.4. Testing the Model
          5. 19.2.9.5. Uses of the Model
          6. 19.2.9.6. Limitations of the Model
    9. 20. Binomial Option Pricing
      1. 20.1. Review of Theory and Concepts
        1. 20.1.1.
          1. 20.1.1.1. Binomial Trees
          2. 20.1.1.2. Risk-Neutral Valuation
          3. 20.1.1.3. Valuing European Options
          4. 20.1.1.4. Valuing American Options
          5. 20.1.1.5. Valuing Options on Stocks with Known Dividend Yield
          6. 20.1.1.6. Valuing Options on Stocks with Known Dollar Dividends
          7. 20.1.1.7. Specifying the Parameters for Binomial Trees
      2. 20.2. Modeling Examples
        1. 20.2.1. MODEL 1: EUROPEAN OPTIONS ON STOCKS WITH KNOWN DIVIDEND YIELD
          1. 20.2.1.1. The Problem
          2. 20.2.1.2. Modeling Strategy
          3. 20.2.1.3. Building the Model
          4. 20.2.1.4. Testing the Model
          5. 20.2.1.5. Uses of the Model
        2. 20.2.2. MODEL 2: AMERICAN OPTIONS ON STOCKS PAYIBI6 HO DIVIDEND
          1. 20.2.2.1. The Problem
          2. 20.2.2.2. Modeling Strategy
          3. 20.2.2.3. Building the Model
          4. 20.2.2.4. Testing the Model
          5. 20.2.2.5. Uses of the Model
        3. 20.2.3. MODEL 3: AMERICAN OPTIONS ON STOCKS WITH KNOWN DIVIDEND YIELDS
          1. 20.2.3.1. The Problem
          2. 20.2.3.2. Modeling Strategy
          3. 20.2.3.3. Building the Model
          4. 20.2.3.4. Testing the Model
          5. 20.2.3.5. Uses of the Model
        4. 20.2.4. MODEL 4: AMERICAN OPTIONS ON STOCKS WITH KNOWN DOLLAR DIVIDENDS
          1. 20.2.4.1. The Problem
          2. 20.2.4.2. Modeling Strategy
          3. 20.2.4.3. Building the Model
          4. 20.2.4.4. Testing the Model
          5. 20.2.4.5. Uses of the Model
  6. 3. VBA for Financial Modeling
    1. 21. Introduction to VBA
      1. 21.1. WHY LEARN VBA?
        1. 21.1.1. WHY LEARN VBA?
          1. 21.1.1.1. Benefits of Learning Programming
          2. 21.1.1.2. Benefits of Choosing VBA
          3. 21.1.1.3. Versions of Excel's Programming Language
        2. 21.1.2. UNDERSTANDING PROGRAMS
          1. 21.1.2.1. The Different Names for Programs
      2. 21.2. Example of a VBA Model
        1. 21.2.1.
          1. 21.2.1.1. The Problem
        2. 21.2.2. RUNNING THE MODEL
        3. 21.2.3. ANALYZING THE MODEL
          1. 21.2.3.1. The Code for the Model
          2. 21.2.3.2. Analysis of the Cods
        4. 21.2.4. THE ORDER OF STATEMENTS
      3. 21.3. Recording Macros
        1. 21.3.1.
          1. 21.3.1.1. Uses of the Macro Recorder
          2. 21.3.1.2. Limitations of the Macro Recorder
          3. 21.3.1.3. Absolute and Relative Reference
          4. 21.3.1.4. Assigning Shortcut Keys to Macros
          5. 21.3.1.5. The Personal Macro Workbook
      4. 21.4. Using VBA's Help
        1. 21.4.1. FINDING HELP IN EXCEL 2007
        2. 21.4.2. FINDING HELP IN PREVIOUS VERSIONS OF EXCEL
          1. 21.4.2.1. Using the Office Assistant
          2. 21.4.2.2. Using the Full Help Window to Get Help
        3. 21.4.3. Other Ways to Access Help
      5. 21.5. The Strategy to Learn VBA Efficiently
    2. 22. VBA Essentials
      1. 22.1. An Overview of VBA
        1. 22.1.1.
          1. 22.1.1.1. An Overview of VBA
          2. 22.1.1.2. Two Key Differences between Excel and VBA
      2. 22.2. The Visual Basic Editor
        1. 22.2.1. THE VBE WINDOW
          1. 22.2.1.1. Menu Bar
          2. 22.2.1.2. Toolbar
          3. 22.2.1.3. Project Explorer Window
          4. 22.2.1.4. Code Window
          5. 22.2.1.5. Other Windows
        2. 22.2.2. USING THE PROJECT EXPLORER WINDOW
          1. 22.2.2.1. Adding a New Module
          2. 22.2.2.2. Renaming a Module
          3. 22.2.2.3. Removing a Module
          4. 22.2.2.4. Exporting and Importing Modules
        3. 22.2.3. USING THE CODE WINDOW
        4. 22.2.4. SETTING VBE OPTIONS
          1. 22.2.4.1. Editor Tab
          2. 22.2.4.2. Editor Format Tab
          3. 22.2.4.3. General
          4. 22.2.4.4. Docking
      3. 22.3. Some Basics
        1. 22.3.1. ENTERING CODE
        2. 22.3.2. RUNNING PROCEDURES
          1. 22.3.2.1. Simple Debugging
        3. 22.3.3. ORGANIZING PROCEDURES IN MODULES
        4. 22.3.4. LINE CONTINUATION
        5. 22.3.5. MULTIPLE STATEMENTS IN ONE LINE
        6. 22.3.6. ADDING COMMENTS
          1. 22.3.6.1. An Additional Use of Comments
        7. 22.3.7. INDENTING CODE LINES
        8. 22.3.8. OPERATORS
          1. 22.3.8.1. The Assignment Operator
          2. 22.3.8.2. Mathematical Operators
          3. 22.3.8.3. Logical Operators
        9. 22.3.9. WORKING WITH TEXT
        10. 22.3.10. THE MSGBOX FUNCTION
        11. 22.3.11. THE INPUTBOX FUNCTION
        12. 22.3.12. THE STOP AND END STATEMENTS
      4. 22.4. Variables, Constants, and Arrays
        1. 22.4.1. NAMING VARIABLES
        2. 22.4.2. CHANGING VARIABLE NAMES
        3. 22.4.3. DATA TYPES
          1. 22.4.3.1. Working with Numbers
          2. 22.4.3.2. Working with Dates
          3. 22.4.3.3. Determining the Data Type
        4. 22.4.4. DECLARING VARIABLES
          1. 22.4.4.1. A Special Reason to Declare All Variables
          2. 22.4.4.2. Forcing Variable Declaration
        5. 22.4.5. SCOPE OF VARIABLES
          1. 22.4.5.1. Procedure-Level Variables
          2. 22.4.5.2. Static variables
          3. 22.4.5.3. Module-Level Variables
          4. 22.4.5.4. Project-Level Variable
        6. 22.4.6. CONSTANTS
        7. 22.4.7. ARRAYS
          1. 22.4.7.1. Array Dimension
          2. 22.4.7.2. Declaring Arrays
          3. 22.4.7.3. Dynamic Arrays
          4. 22.4.7.4. A Few Helpful Functions for Use with Arrays
          5. 22.4.7.5. Scope of Arrays
      5. 22.5. Objects, Properties, and Methods
        1. 22.5.1. OBJECTS
        2. 22.5.2. PROPERTIES
        3. 22.5.3. METHODS
      6. 22.6. Branching
        1. 22.6.1. IF STATEMENTS
          1. 22.6.1.1. If...Then...Else...Statement
          2. 22.6.1.2. If...Then...End If Statement
          3. 22.6.1.3. If...Then...Else...End If Statement
          4. 22.6.1.4. If Structures Using Elself
        2. 22.6.2. SELECT CASE...END SELECT STATEMENT
        3. 22.6.3. GOTO STATEMENT
      7. 22.7. Looping
        1. 22.7.1. FOR...NEXT STATEMENT
        2. 22.7.2. DO...LOOP STATEMENTS
        3. 22.7.3. NESTED LOOPS
        4. 22.7.4. FOR EACH...NEXT STATEMENT
        5. 22.7.5. THE EXIT STATEMENTS
        6. 22.7.6. WITH...END WITH STATEMENT
      8. 22.8. Using Built-In Functions
        1. 22.8.1.
          1. 22.8.1.1. Using the Object Browser to Insert Functions
          2. 22.8.1.2. Using Analysis ToolPak Functions In VBA
    3. 23. Sub and Function Procedures
      1. 23.1. Sub Procedures
        1. 23.1.1.
          1. 23.1.1.1. Sub Procedures
        2. 23.1.2. THE STRUCTURE OF SUB PROCEDURES
        3. 23.1.3. USING SUB PROCEDURES
          1. 23.1.3.1. Why Call Sub Procedures?
          2. 23.1.3.2. Passing Arguments between Procedures
          3. 23.1.3.3. Making Arguments Optional
          4. 23.1.3.4. Another Way to Pass Values
          5. 23.1.3.5. Scope of a Sub Procedure
      2. 23.2. Function Procedures
        1. 23.2.1. THE ADVANTAGES OF FUNCTION PROCEDURES
        2. 23.2.2. THE STRUCTURE OF FUNCTIUN PROCEDURES
        3. 23.2.3. USING FUNCTION PROCEDURES
          1. 23.2.3.1. An Important Restriction
          2. 23.2.3.2. Scope end Passing Arguments
          3. 23.2.3.3. Functions That Return Arrays
          4. 23.2.3.4. Adding Description to a Custom Function
          5. 23.2.3.5. Using Functions from Other Workbooks
    4. 24. Debugging VBA Codes
      1. 24.1. Break Mode
        1. 24.1.1.
          1. 24.1.1.1. Break Mode
        2. 24.1.2. THE FOUR BASIC TYPES OF BUGS
          1. 24.1.2.1. Syntax Errors
          2. 24.1.2.2. Compiler Errors
          3. 24.1.2.3. Runtime Errors
          4. 24.1.2.4. Logical Errors
        3. 24.1.3. THE VBA DEBUGGING TOOLS
          1. 24.1.3.1. MsgBox
          2. 24.1.3.2. Breakpoint
          3. 24.1.3.3. Stop
          4. 24.1.3.4. Stepping
          5. 24.1.3.5. Immediate Window
  7. 4. Financial Modeling Using VBA
    1. 25. How to Build Good VBA Models
      1. 25.1. Attributes of Good VBA Models
        1. 25.1.1.
          1. 25.1.1.1. Realistic
          2. 25.1.1.2. Error-Free
          3. 25.1.1.3. Flexible
          4. 25.1.1.4. Easy to Provide Inputs
          5. 25.1.1.5. Good Output Production
          6. 25.1.1.6. Data Validations
          7. 25.1.1.7. Judicious Formatting
          8. 25.1.1.8. Appropriate Numbers Formatting
          9. 25.1.1.9. Well Organized and Easy to Follow
          10. 25.1.1.10. Statements Are Easy to Read and Understand
          11. 25.1.1.11. Robust
          12. 25.1.1.12. Minimum Hard Coding
          13. 25.1.1.13. Good Documentation
      2. 25.2. Documenting VBA Models
        1. 25.2.1.
          1. 25.2.1.1. Including Comments in the Code
          2. 25.2.1.2. Documenting Larger Models
      3. 25.3. Learning Modeling Using VBA
        1. 25.3.1. SKETCHING THE VBA CODE
        2. 25.3.2. THE THREE LEARNING TRACKS
          1. 25.3.2.1. Learning Track 1 (Most Challenging)
          2. 25.3.2.2. Learning Track 2
          3. 25.3.2.3. Learning Track 3 (Least Challenging)
    2. 26. Time Value of Money
      1. 26.1. Review of Theory and Concepts
        1. 26.1.1.
          1. 26.1.1.1. Review of Theory and Concepts
        2. 26.1.2. SOLVING PROBLEMS BY ITERATION
          1. 26.1.2.1. The Intuitive Approach
          2. 26.1.2.2. The Bisection Method
          3. 26.1.2.3. Using Excel's Goal Seek
      2. 26.2. Modeling Examples
        1. 26.2.1. MODEL 1: LOAN AMORTIZATION TABLE, VERSION 1
          1. 26.2.1.1. The Problem
          2. 26.2.1.2. Modeling Strategy
          3. 26.2.1.3. The Code for the Model
          4. 26.2.1.4. Analysis of the Code
          5. 26.2.1.5. Testing the Model
          6. 26.2.1.6. Modifying the Program
          7. 26.2.1.7. Adding Table Headings, Labels, and So On
        2. 26.2.2. MODEL 2: LOAN AMORTIZATION TABLE, VERSION 2
          1. 26.2.2.1. The Problem
          2. 26.2.2.2. Modeling Strategy
          3. 26.2.2.3. The Code for the Model
          4. 26.2.2.4. Analysis of the Code
          5. 26.2.2.5. Testing the Model
          6. 26.2.2.6. Conditions Usod In Do Loops
          7. 26.2.2.7. Limitations of the Model
        3. 26.2.3. MODEL 3: LOAN AMORTIZATION TABLE, VERSION 3
          1. 26.2.3.1. The Problem
          2. 26.2.3.2. Modeling Strategy
          3. 26.2.3.3. The Code for the Model
          4. 26.2.3.4. Analysis of the Code
          5. 26.2.3.5. Testing the Model
        4. 26.2.4. MODEL 4: LOAN AMORTIZATION TABLE, VERSION 4
          1. 26.2.4.1. The Problem
          2. 26.2.4.2. Modeling Strategy
          3. 26.2.4.3. The Code for the Model
          4. 26.2.4.4. Analysis of the Code
          5. 26.2.4.5. Testing the Model
        5. 26.2.5. MODEL 5: LOAN AMORTIZATION TABLE OSING GOAL SEEK
          1. 26.2.5.1. The Problem
          2. 26.2.5.2. Modeling Strategy
          3. 26.2.5.3. Analysis of the Code
          4. 26.2.5.4. Testing the Model
          5. 26.2.5.5. Advantages and Disadvantages
        6. 26.2.6. MODEL 6: LOAN AMORTIZATION TABLE USING ARRAYS
          1. 26.2.6.1. The Problem
          2. 26.2.6.2. Modeling Strategy
          3. 26.2.6.3. The Code for the Model
          4. 26.2.6.4. Analysis of the Code
          5. 26.2.6.5. Testing the Model
        7. 26.2.7. MODEL 7: MYPMT FUNCTION
          1. 26.2.7.1. The Problem
          2. 26.2.7.2. Modeling Strategy
          3. 26.2.7.3. The Code for the Model
          4. 26.2.7.4. Analysis of the Code
          5. 26.2.7.5. Testing the Model
        8. 26.2.8. MODEL 8: LOAN AMORTIZATION TABLE USING THE BISECTION METHOD
          1. 26.2.8.1. The Problem
          2. 26.2.8.2. Modeling Strategy
          3. 26.2.8.3. The Code for the Model
          4. 26.2.8.4. Analysis of the Code
          5. 26.2.8.5. Testing the Model
        9. 26.2.9. MODEL 9; LOAN AMORTIZATION TABLE FOR CHANGING INTEREST RATE
          1. 26.2.9.1. The Problem
          2. 26.2.9.2. Modeling Strategy
          3. 26.2.9.3. The Code for the Model
          4. 26.2.9.4. Analysis of the Code
          5. 26.2.9.5. Testing the Model
        10. 26.2.10. MODEL 10: LOAN AMORTIZATION TABLE FOR CHANGING ANNUAL PAYMENT
          1. 26.2.10.1. The Problem
          2. 26.2.10.2. Modeling Strategy
          3. 26.2.10.3. The Code for the Model
          4. 26.2.10.4. Analysis of the Code
          5. 26.2.10.5. Testing the Model
    3. 27. Financial Planning and Investments
      1. 27.1. Modeling Examples
        1. 27.1.1. MODEL 1: SAVING FOR RETIREMENT, VERSION 1
          1. 27.1.1.1. The Problem
          2. 27.1.1.2. Modeling Strategy
          3. 27.1.1.3. The Code for the Model
          4. 27.1.1.4. Analysis of the Cods
          5. 27.1.1.5. Testing the Model
          6. 27.1.1.6. Limitation of the Model
        2. 27.1.2. MODEL 2: SAVING FOR RETIREMENT, VERSION 2
          1. 27.1.2.1. The Problem
          2. 27.1.2.2. Modeling Strategy
          3. 27.1.2.3. The Code for the Model
          4. 27.1.2.4. Analysis of the Cods
          5. 27.1.2.5. Testing the Model
          6. 27.1.2.6. Uses of the Model
        3. 27.1.3. MODEL 3: RETIREMENT PLANNING IN NOMINAL DOLLARS, VERSION 1
          1. 27.1.3.1. The Problem
          2. 27.1.3.2. Modeling Strategy
          3. 27.1.3.3. The Code for the Model
          4. 27.1.3.4. Analysis of the Code
          5. 27.1.3.5. Testing the Model
          6. 27.1.3.6. Uses of the Model
        4. 27.1.4. MODEL 4: RETIREMENT PLANNING IN NOMINAL DOLLARS, VERSION 2
          1. 27.1.4.1. The Problem
          2. 27.1.4.2. Modeling Strategy
          3. 27.1.4.3. The Code for the Model
          4. 27.1.4.4. Analysis of the Code
          5. 27.1.4.5. Testing the Model
          6. 27.1.4.6. Uses of the Model
        5. 27.1.5. MODEL 5: PORTFOLIO STRUCTURING
          1. 27.1.5.1. The Problem
          2. 27.1.5.2. Modeling Strategy
          3. 27.1.5.3. The Code for the Model
          4. 27.1.5.4. Analysis of the Cade
          5. 27.1.5.5. Testing the Model
          6. 27.1.5.6. Uses of the Model
    4. 28. Analyzing Market History
      1. 28.1. Modeling Examples
        1. 28.1.1. MODEL 1: NOMINAL AND REAL GROWTH OF $1 INVESTMENT IN STOCKS
          1. 28.1.1.1. The Problem
          2. 28.1.1.2. Modeling Strategy
          3. 28.1.1.3. The Code for the Model
          4. 28.1.1.4. Analysis of the Code
          5. 28.1.1.5. Testing the Code
          6. 28.1.1.6. Uses of the Model
        2. 28.1.2. MODEL 2: GROWTH OF $1 INVESTMENT IN DIFFERENT ASSETS
          1. 28.1.2.1. The Problem
          2. 28.1.2.2. Modeling Strategy
          3. 28.1.2.3. The Coda for the Modal
          4. 28.1.2.4. Analysts of the Cods
          5. 28.1.2.5. Testing the Code
          6. 28.1.2.6. Uses of the Model
        3. 28.1.3. MODEL 3: COMPARING ROLLING PERIOD RETURNS
          1. 28.1.3.1. The Problem
          2. 28.1.3.2. Modeling Strategy
          3. 28.1.3.3. The Code for the Model
          4. 28.1.3.4. Analysis of the Code
          5. 28.1.3.5. Testing the Code
          6. 28.1.3.6. Uses of the Model
    5. 29. Simulating Stock Prices
      1. 29.1. Modeling Examples
        1. 29.1.1. MODEL 1: ESTIMATING A STOCK'S VOLATILITY
          1. 29.1.1.1. The Problem
          2. 29.1.1.2. Modeling Strategy
          3. 29.1.1.3. The Code for the Model
          4. 29.1.1.4. Analysis of the Code
          5. 29.1.1.5. Testing the Model
          6. 29.1.1.6. Uses of the Model
        2. 29.1.2. MODEL 2: SIMULATING STOCK PRICES
          1. 29.1.2.1. The Problem
          2. 29.1.2.2. Modeling Strategy
          3. 29.1.2.3. The Code for the Model
          4. 29.1.2.4. Analysis of the Code
          5. 29.1.2.5. Testing the Model
          6. 29.1.2.6. Uses of the Model
    6. 30. Options and Option Portfolios
      1. 30.1. Modeling Examples
        1. 30.1.1. MODEL 1: PROFIT OF OPTIONS PORTFOLIO AT EXPIRATION
          1. 30.1.1.1. The Problem
          2. 30.1.1.2. Modeling Strategy
          3. 30.1.1.3. The Code for the Model
          4. 30.1.1.4. Analysis of the Code
          5. 30.1.1.5. Testing the Model
          6. 30.1.1.6. Uses at the Model
          7. 30.1.1.7. Limitations and Flexibility of the Model
        2. 30.1.2. MODEL 2: OPTION PRICING USING THE BSM EQUATIONS
          1. 30.1.2.1. The Problem
          2. 30.1.2.2. Modeling Strategy
          3. 30.1.2.3. The Code for the Model
          4. 30.1.2.4. Analysis of the Code
          5. 30.1.2.5. Function Description
          6. 30.1.2.6. Testing the Model
          7. 30.1.2.7. Uses of the Model
        3. 30.1.3. MODEL 3: IMPLIED VOLATILITY OF OPTIONS
          1. 30.1.3.1. The Problem
          2. 30.1.3.2. Modeling Strategy
          3. 30.1.3.3. The Code for the Model
          4. 30.1.3.4. Analysis of the Code
          5. 30.1.3.5. Testing the Model
          6. 30.1.3.6. Volatility Smiles
        4. 30.1.4. MODEL 4: PROFIT OF OPTIONS PORTFOLIO AT ANY TIME
          1. 30.1.4.1. The Problem
          2. 30.1.4.2. Modeling Strategy
          3. 30.1.4.3. The Code for the Model
          4. 30.1.4.4. Analysis of the Code
          5. 30.1.4.5. Testing the Code
          6. 30.1.4.6. Uses of the Model
    7. 31. Binomial Option Pricing
      1. 31.1. Modeling Examples
        1. 31.1.1. MODEL 1: EUROPEAN OPTIONS ON STOCKS WITH KNOWN DIVIDEND YIELD
          1. 31.1.1.1. The Problem
          2. 31.1.1.2. Modeling Strategy
          3. 31.1.1.3. The Code for the Model
          4. 31.1.1.4. Analysis of the Code
          5. 31.1.1.5. Testing the Model
          6. 31.1.1.6. Uses of the Model
        2. 31.1.2. MODEL 2: AMERICAN OPTIONS OH STOCKS PAYING NQ DIVIDEND
          1. 31.1.2.1. The Problem
          2. 31.1.2.2. Modeling Strategy
          3. 31.1.2.3. The Code for the Model
          4. 31.1.2.4. Analysis of the Code
          5. 31.1.2.5. Testing the Model
          6. 31.1.2.6. Uses of the Model
        3. 31.1.3. MODEL 3: AMERICAN OPTIONS ON ST0CKS WITH KNOWN DIVIDEND YIELDS
          1. 31.1.3.1. The Problem
          2. 31.1.3.2. Modeling Strategy
          3. 31.1.3.3. Testing the Model
          4. 31.1.3.4. Uses of the Model
        4. 31.1.4. MODEL 4: AMERICAN OPTIONS ON STOCKS WITH KNOWN DOLLAR DIVIDENDS
          1. 31.1.4.1. The Problem
          2. 31.1.4.2. Modeling Strategy
          3. 31.1.4.3. The Code for the Model
          4. 31.1.4.4. Analysis of the Code
          5. 31.1.4.5. Testing the Model
          6. 31.1.4.6. Uses of the Model
  8. A. Keyboard Shortcuts for Excel
  9. B. VBA Quick Reference
  10. C. Excel and VBA Built-In Functions
    1. C.1. Scope of a Function
      1. C.1.1.
        1. C.1.1.1. Scope of a Function
  11. About the CD-ROM
    1. C.2. What's on the CD
    2. C.3. System Requirements
      1. C.3.1. USING THE CD WITH WINDOWS
      2. C.3.2. USING THE CD WITH MACINTOSH
      3. C.3.3. APPLICATIONS
    3. C.4. Customer Care