Mastering Risk Modelling: A Practical Guide to Modelling Uncertainty with Microsoft Excel, 2nd Edition

Description

Risks are everywhere in the business world. Mastering Risk Modelling provides the busy financial manager with useful tips andpractical templates for assessing, applying and modelling risk and uncertainty in Excel. The book is designed specifically to be of help to you if you don’t have time to start from scratch – it will improve your abilities in Excel and give you a library of basic examples that you can use as a basis for further development.

It covers:

• Review of model design

• Risk and uncertainty

• Credit risk

• Project finance

• Financial analysis

• Valuation

• Options

• Bonds

• Equities

• Value at risk

• Simulation

This second edition contains brand new chapters:

• Revised models

• More material on credit risk modelling e.g. portfolios, bankruptcy models

• Shows dual 2003/2007 Excel key strokes

• More theory especially on statistics in Excel

• Basic statistics in Excel – tools and methods

• Capacity to borrow and repay

• Finding optimum mix of risk and return

• Fixed income risk models

• Visual Basic approach

Sample Content

Table of Contents

       Conventions
       Overview

1     Introduction

       Scope of the book

       Example model

       Objectives of risk modelling

       Summary

2     Review of model design

       Introduction

       Design objectives

       Common errors

       Excel features

       Formats

       Number formats

       Lines and borders

       Colour and patterns

       Specific colour for inputs and results

       Data validation

       Controls – combo boxes and buttons

       Conditional formatting

       Use of functions and types of functions

       Add-ins for more functions

       Text and updated labels

       Recording a version number, author, etc.

       Using names

       Pasting a names table

       Comment cells

       Graphics

       Dynamic graphs to plot individual series

       Data tables

       Scenarios

       Spreadsheet auditing

       Summary

3     Risk and uncertainty

       Introduction

       Risk

       Uncertainty

       Response to risk

       Methods

       Summary

4     Project finance

       Introduction

       Requirements

       Advantages

       Risks

       Risk analysis

       Risk mitigation

       Financial model

       Inputs

       Sensitivity and cost of capital

       Construction, borrowing and output

       Accounting schedules

       Management analysis and summaries

       Summary

5     Simulation

       Introduction

       Building blocks

       Procedure

       Real estate example

       Summary

6     Financial analysis

       Introduction

Updates

Submit Errata