Financial Modeling

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.