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FIN 3616 Financial Decision making with Excel

FIN 3616 Financial Decision making with Excel

Course code: 
FIN 3616
Department: 
Finance
Credits: 
7.5
Course coordinator: 
Chunyu Yang
Product category: 
Bachelor
Portfolio: 
Bachelor of Finance - Programme Courses
Semester: 
2020 Spring
Active status: 
Active
Teaching language: 
English
Course type: 
One semester
Introduction

A central element of the job of any professional in corporate finance, fund management, security analysis, or risk management is the real-world application of financial theories to provide quantitative answers to various problems. As those theories are usually presented in a sterile, simplified environment for pedagogical reasons, it is often not straightforward how they can be implemented in practice. This course aims at showing students how the sometimes abstract models and theories are used to address real-world problems encountered in practice. The practical implementation of the theories and models also facilitates the complete understanding of them. Additionally the students will be benefitted by having created throughout the course a collection of templates that can be readily used later on in practice.

Probably the most widely used tool by financial practitioners is Excel. During the course students will learn how to use this powerful program to apply a series of financial models which the students will likely have encountered in their previous courses. For each concept applied the course will provide a brief overview of the relevant theory or model but focus mostly on the practical side of the implementation. It will explain how these models can be implemented in Excel using its built-in functions, matrix calculation, and programming language (VBA). The course will also highlight which real-world financial data is the appropriate input for those models. It will point out different modeling options and discuss advantages and limitations of those approaches. The content of the course will employ theories that have been taught in previous classes. In various areas, the course will delve deeper and provide students with state of the art models that go beyond what was covered in previous courses. Thus, a good understanding of the material covered in the previous finance courses is required to fully benefit from this course.

Learning outcomes - Knowledge

The students will acquire a good understanding of how different financial models can be efficiently implemented with the help of a spreadsheet program. More specifically the students will develop an understanding of the following topics:

  • Basic financial calculations (present value, future value, NPV, IRR, etc)
  • Portfolio optimization and Black-Litterman model
  • Corporate valuation model (WACC, enterprise value)
  • Excel VBA programming
  • Binomial option pricing model
Learning outcomes - Skills

During the acquisition of the above mentioned knowledge the students will acquire the following skills:

  • Advanced Excel handling: functions, matrix calculation, Excel solver, data table
  • Solving optimal portfolio in Excel
  • Working knowledge of Bloomberg: downloading data from Bloomberg directly and via Excel
  • Evaluating enterprise value and stock price
  • Implementing derivative pricing models in Excel
  • Programming skills in Excel VBA
General Competence

The students having successfully completed this course will be able not only to apply the various finance models and theories taught throughout their studies but also understand the applicability of these theories in light of the working assumptions required for those theories to be useful in practice.

  • How to solve retirement planning problem in Excel
  • How to construct optimal portfolio using historical data and Excel
  • How to evaluate stock price using corporate valuation theory
  • How to price derivative securities in Excel
  • How to write new functions in Excel VBA
Course content
  • Introduction to Excel and Bloomberg
  • Valuation and Capital Budgeting
  • Portfolio Choice and Black-Litterman Model
  • CAPM and Cost of Capital
  • Excel VBA Programming
  • Derivative Pricing
  • Bond Pricing and Monte Carlo Simulation (if time allows)
Teaching and learning activities

Excel provides a completely digital platform that can easily connect data, analysis, and results. To take advantage of this digital platform, this course provides students trainings to describe, abstract, and solve challenging problems in a digital way. Given the global impact of Excel, mastering Excel is essential for the international job market.

The course will include a combination of lectures and computer workshops. The lectures will focus on the exposition of the relevant theories as well as the exposition of the assumptions and limitations of the theories. The workshops will be based on hands-on experience of both the implementation of the models and the development of Excel capabilities. One or more lecture and workshop sessions will be spent on Bloomberg with the focus on how to obtain and transfer data to Excel.

The lectures will be plenary sessions. The computer workshops (Bloomberg and Excel workshops) will be divided into multiple repeating sessions due to limited capacity of the Bloomberg room and the PC room.

This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. All components will be weighted together according to the information below in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. Specific information regarding student evaluation beyond the information given in the course description will be provided in class.

At re-sit all exam components must, as a main rule, be retaken during next scheduled course.

Software tools
Software defined under the section "Teaching and learning activities".
Additional information

At re-sit it will be required that the entire evaluation process is conducted again, and that students who do not achieve points in one or more exam components will get a lower grade or fail the course. Previously conducted examination components will not be part of the assessment for a new grade.

Qualifications

Higher Education Entrance Qualification.

Required prerequisite knowledge

FIN 3521 Corporate Finance or EXC3671 Corporate Finance, or equivalent.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
FIN36161
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
30No1 Semester(s)Group (2 - 4)group assignments
Exam category:
Submission
Form of assessment:
Structured test
Exam code:
FIN36161
Grading scale:
Point scale
Grading rules:
Internal and external examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
70Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
  • Interest table
Individual Final Exam
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:30
Invigilation:No
Grouping (size):Group (2-4)
Support materials:
Duration:1 Semester(s)
Comment:group assignments
Exam code:FIN36161
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Structured test
Weight:70
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
  • Interest table
Duration:3 Hour(s)
Comment:Final Exam
Exam code: FIN36161
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Type of Assessment: 
Continuous assessment
Grading scale: 
ECTS
Total weight: 
100
Activity
Teaching on Campus
Duration of activity
21
Duration type (weeks, hours etc.)
Hour(s)
Activity
Other in classroom
Duration of activity
21
Duration type (weeks, hours etc.)
Hour(s)
Comment
Computer workshops.
Activity
Prepare for teaching
Duration of activity
42
Duration type (weeks, hours etc.)
Hour(s)
Activity
Submission(s)
Duration of activity
84
Duration type (weeks, hours etc.)
Hour(s)
Activity
Student's own work with learning resources
Duration of activity
32
Duration type (weeks, hours etc.)
Hour(s)