This book teaches the reader how to build financial modelsnot templateswith step-by-step instructions in Excel.Progressing from simple examples to practical, real-world applications, this book covers modeling for bonds and fixed income securities; stocks and security analysis; and options, futures, and derivatives.For financial planners and analysts.
Table of Contents
I. BONDS/FIXED INCOME SECURITIES. 1. Reading Bond Listings. Basics. 2. Bond Pricing. Annual Payments. APR vs. EAR. By Yield to Maturity. System of Five Bond Variables. Dynamic Chart. Problems. 3. Bond Duration. Basics. Price Sensitivity Using Duration. Dynamic Chart. Problems. 4. Bond Convexity. Basics. Price Sensitivity Including Convexity. Dynamic Chart. Problems. 5. Using the Yield Curve. To Price a Coupon Bond. To Determine Forward Rates. Problems. 6. U.S. Yield Curve Dynamics. Dynamic Chart. 7. Linear Factor Models of the Yield Curve. Background. 8. The Vasicek Model. Basics. Dynamic Chart. Problems. II. STOCKS/SECURITY ANALYSIS. 9. Portfolio Optimization. Two Assets. Many Assets. Dynamic Chart. Full-Scale Real Data. Problems. 10. Portfolio Diversification Lowers Risk. Basics. International. 11. Life-Cycle Financial Planning. Basics. Problems. 12. Dividend Discount Models. Two Stage. Dynamic Chart. Problems. 13. Du Pont System of Ratio Analysis. Basics. Problems. III. OPTIONS/FUTURES/DERIVATIVES. 14. Options Payoffs and Profits. Basics. Problems. 15. Option Trading Strategies. Two Assets. Four Assets. Problems. 16. Put-Call Parity. Basics. Payoff Diagram. Problems. 17. Binomial Option Pricing. Single Period. Multi-Period. Risk Neutral. Full-Scale Real Data. Problems. 18. Black Scholes Option Pricing. Basics. Dynamic Chart. Continuous Dividend. Implied Volatility. Problems. 19. Spot-Futures Parity (Cost of Carry). Basics. Index Arbitrage. Problems. 20. Interest Rate Parity. Basics. Term Structure of Forward Rates. Problems.