98655 - Models and Methods for Finance

Learning outcomes

On the completion of the course, students will be equipped with the basics of financial theory, and they will be able to combine financial concepts with model design. This includes the ability to deal with basic financial arithmetics, investment opportunities, loans and amortization tables, fixed-income products and their risk. The course is applied in nature, as financial concepts will be systematically presented using spreadsheet examples. At the end of the course, students will be able to combine the understanding of financial theory with spreadsheet modelling.

Course contents

- Introduction to finance.
- The time value of money.
- Measures for evaluation of investment opportunities.
- Loans and amortization tables.
- Effective interest rates.
- Bond valuation.
- Yield curve and interest rate risk.

Readings/Bibliography

Selected chapters from the following text:

- BENNINGA, S. and T. MOFKADI, Principles of Finance with Excel, 3/Ed., 2017, Oxford University Press.

Other relevant materials (slides, templates, papers, etc.) will be posted on the class website, available through the Virtuale learning platform.

Teaching methods

Lectures and seminars. There will typically be two lectures and one seminar per week. Lectures and seminars will be on-campus, in person.

Assessment methods

The first partial exam will be a test that will take place after the first five weeks of classes. It will include 8 multiple-choice questions (1 point each) and 4 short exercises (2 points each), to be answered in 45 minutes.

The take-home exam will be an open-book exam that students have to complete by themselves at home. They will be given one full day to complete the task. The take-home exam will include some exercises that will have to be solved using a spreadsheet, and students will have to submit their file online. The take-home exam is a single student’s work and must be completed without help from others.

The second partial exam will be a test that will take place after the second five weeks of classes. It will include 8 multiple-choice questions (1 point each) and 4 short exercises (2 points each), to be answered in 45 minutes.

A student’s final grade will be based on the following weights:
- sum of the grades in the two partial exams: 75%;
- take-home exam: 25%.

Grading scale:
- Less than 18: Fail
- 18-23: Sufficient
- 24-27: Average/Good
- 28-30: Very good
- 30 cum laude: Excellent/Outstanding

Teaching tools

Slides, spreadsheets. (Teaching materials will be available on the Virtuale learning platform.)

Office hours

See the website of Massimiliano Barbi