Financial Modelling with Excel (BS0196)

? Credit Points : 20 ? SCQF Level : 10 ? Acronym : MSE-4-FME

Financial Modelling is intended to give students the opportunity to widen and deepen their knowledge of financial theory and practice by explaining how financial models and techniques may be implemented. Students are expected to use Excel to model a number of common applications including the construction of portfolios, tests of market efficiency, estimation of risk measures, performance measurement and the valuation of options. By the end of the course students should have a much clearer understanding of finance concepts as well as an extended knowledge of the spreadsheet package.

Entry Requirements

? Pre-requisites : Futures and Options (BS0194)

Subject Areas

Home subject area

Business Studies, (Management School and Economics, Schedule H)

Delivery Information

? Normal year taken : 4th year

? Delivery Period : Semester 2 (Blocks 3-4)

? Contact Teaching Time : 2 hour(s) per week for 10 weeks

All of the following classes

Type	Day	Start	End	Area
Laboratory	Monday	09:00	10:50	Central

Summary of Intended Learning Outcomes

Course Objectives and Learning Outcomes

Financial Modelling is intended to give students the opportunity to widen and deepen their knowledge of financial theory and practice by explaining how financial models and techniques may be implemented. Students are expected to use Excel to model a number of common applications including the construction of portfolios, tests of market efficiency, estimation of risk measures, performance measurement, and the valuation of options.

After completing this course, students should understand and be able to:
- Construct and examine the characteristics of distributions of returns
- Calculate the variance co-variance matrix and use it to select optional portfolios
- Test for market efficiency using simple tests
- Develop, construct and run an event study analysis of the abnormal returns
- Estimate betas and calculate a firm's cost of capital
- Calculate the value of an option using Black Scholes and the binomial model
Use and develop spreadsheet based solutions to financial problems

Assessment Information

Assessment is by a computer based class examination. Examinations involve providing solutions to financial problems using the facilities available within Excel. Students are expected to complete the weekly assignments and check their solutions with those provided in the course files and worksheets.