# Mastering Financial Mathematics in Microsoft Excel: A practical guide to business calculations, 3rd Edition

Published Date: Nov 23, 2015

## Description

Fully updated and compliant with Excel 2013, this clearly explains the basic calculations for mathematical finance, backed up with simple templates for further use and development, and a workbook with exercises and solutions at the end of each chapter. The examples used are relevant to both managers and students in the UK and overseas.

New to this edition

• Updated glossary of key terms
• Functions list in English and Euro languages
• Continuity check on all formats, layouts and charts
• More worked examples
• Additional exercises at the end of each chapter to help build models
• Templates and models available online

Acknowledgements

Conventions

Overview

Warranty and disclaimer

1 Introduction

Overview

Common Excel errors

Systematic design method

Auditing

Summary

2 Basic financial arithmetic

Simple interest

Compound interest

Nominal and effective rates

Continuous discounting

Conversions and comparisons

Exercise

Summary

3 Cash flows

Net present value

Internal rate of return

XNPV and XIRR

XNPV periodic example

Modified internal rate of return

Exercise

Summary

4 Bonds calculations

Description

Cash flows

Zero coupons

Yield

Yield to call

Price and yield relationship

Yield curve pricing

Other yield measures

Yield measures

Exercise

Summary

5 Bonds risks

Risks

Duration

Convexity

Comparison

Exercise

Summary

6 Floating rate securities

Floating rates

Characteristics of interest rate securities

Yield evaluation

Coupon stripping

Exercise

Summary

7 Amortization and depreciation

Amortization

Full amortization

Delayed payments

Sum of digits

Straight line and declining balance depreciation

UK declining balance method

Double declining balance depreciation

French depreciation

Exercise

Summary

8 Swaps

Definitions

How swaps save money

Terminating interest rate swaps

Implicit credit risk

Worked single currency swap

Valuation

Cross currency swap

Worked example

Swaptions

Exercise

Summary

9 Forward interest rates

Definitions

Example forward rates

Hedging principles

Forward rate agreement

Yield curves

Exercise

Summary

10   Futures

Futures market

Terminology

Benefits

Clearinghouse operation

Bond futures

Hedging mechanisms

Hedging example one

Hedging example two

Exercise

Summary

11   Foreign exchange

Risk

Spot rates

Longer dates

Equivalence

Comparisons and arbitrage

Exercise

Summary

12   Options

Description

Terminology

Underlying asset

Call options

Put options

Example

Covered call

Insurance using a stock and a long put

Pricing models

Black Scholes model

Call put parity

Greeks

Binomial models

Comparison to Black Scholes

Exercise

Summary

13   Real options

Real options

Black Scholes model

Binomial model

Exercise

Summary

14   Valuation

Valuation methods

Assets

Market methods

Multi-period dividend discount models

Free cash flow valuation

Economic profit

Exercise

Summary

15   Leasing

Economics of leasing

Interest rates

Classification

Amortization

Accounting

Settlements

Lessor evaluation

Lessee evaluation

Exercise

Summary

16   Basic statistics

Methods

Descriptive statistics

Probability distributions

Sampling/Central Limit Theorem

Hypothesis testing

Correlation and regression

LINEST function

Exercise

Summary

Appendices

1 Exercise answers, functions list, software installation and licence

2 Microsoft® Office Menus

Index

### Print

\$79.99 | ISBN-13: 978-1-292-06750-6

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