A practical guide to understanding and implementing financial simulation modeling
As simulation techniques become more popular among the financial community and a variety of sub-industries, a thorough understanding of theory and implementation is critical for practitioners involved in portfolio management, risk management, pricing, and capital budgeting. Financial Simulation Modeling in Excel contains the information you need to make the most informed decisions possible in your professional endeavors.
Financial Simulation Modeling in Excel contains a practical, hands-on approach to learning complex financial simulation methodologies using Excel and VBA as a medium. Crafted in an easy to understand format, this book is suitable for anyone with a basic understanding of finance and Excel. Filled with in-depth insights and expert advice, each chapter takes you through the theory behind a simulation topic and the implementation of that same topic in Excel/VBA in a step-by-step manner.
- Organized in an easy-to-follow fashion, this guide effectively walks you through the process of creating and implementing risk models in Excel
- A companion website contains all the Excel models risk experts and quantitative analysts need to practice and confirm their results as they progress
- Keith Allman is the author of other successful modeling books, including Corporate Valuation Modeling and Modeling Structured Finance Cash Flows with Microsoft Excel
Created for those with some background in finance and experience in Excel, this reliable resource shows you how to effectively perform sound financial simulation modeling, even if you've yet to do extensive modeling up to this point in your professional or academic career.
From the Back Cover
Created by the expert author team of Keith Allman, Josh Laurito, and Michael Loh, Financial Simulation Modeling in Excel contains valuable theoretical insights as well as practical exercises that will help you transform financial concepts into dynamic, usable models. And because simulation has its place in many different parts of finance, this well-rounded resource takes you step by step through the process of creating multiple, smaller modelsusing Microsoft® Excel® and VBAas opposed to a single unified model.
Each section begins with a discussion of theorywith enough background and mathematical formulas provided to reinforce the concept coveredand then moves on to a Model Builder exercise where the theory is transferred to an application in Microsoft® Excel®. Along the way, this accessible guide:
Works through random number generation, explains Brownian motion, and explores correlation between variables with specific examples
Takes you through simulating interest rate paths to price bonds
Creates a corporate default simulation based on structural and reduced form models
Provides a thorough look at simulating pools of assets
Addresses data deficiencies and how to manage data as it relates to a simulation
Complete with a companion website that contains information including Model Builder files, this book is an essential guidefor both seasoned professionals and those new to the world of financial simulation modelingto understanding the intricacies of this discipline and excelling at it.