The third edition of this standard text retains the popular
'cookbook' features of earlier editions and includes
expanded and new coverage of such topics as bank valuation, the
Black-Litterman portfolio selection model, Monte Carlo pricing
methods, array function, and getting information from the Internet
Too often, finance courses stop short of making a connection
between textbook finance and the problems of real-world business.
Financial Modeling bridges this gap between theory and practice by
providing a nuts-and-bolts guide to solving common financial models
with spreadsheets. Simon Benninga takes the reader step by step
through each model, showing how it can be solved using Microsoft
The long-awaited third edition of this standard text maintains the
'cookbook' features and Excel dependence that have made the
first and second editions so popular. It also offers significant
new material, with new chapters covering such topics as bank
valuation, the Black-Litterman approach to portfolio optimization,
Monte Carlo methods and their applications to option pricing, and
using array functions and formulas. Other chapters, including those
on basic financial calculations, portfolio models, calculating the
variance-covariance matrix, and generating random numbers, have
been revised, with many offering substantially new and improved
material. Other areas covered include financial statement modeling,
leasing, standard portfolio problems, value at risk (VaR), real
options, duration and immunization, and term structure modeling.
Technical chapters treat such topics as data tables, matrices, the
Gauss-Sidel method, and tips for using Excel. The last section of
the text covers the Visual Basic for Applications (VBA) techniques
needed for the book. The accompanying CD contains Excel worksheets
and solutions to end-of-chapter exercises.
For the 2nd Edition: "Benninga has a clear writing style and uses numerous illustrations, which make this book one of the best texts on using Excel for finance that I've seen." Ed McCarthy Ticker Magazine For the 2nd Edition: "The author describes this as a 'cookbook' and that is a good analogy... Its breadth is extensive, covering simple present valuing and cost of capital... to the likes of real options and early exercise of American-style options... A worthwhile acquisition." Paul Dentskevitch Risk Magazine
Simon Benninga is Professor of Finance at Tel Aviv University and Visiting Professor of Finance at the Wharton School at the University of Pennsylvania.