Excel Modeling and Estimation in Investments [With CDROM]

by Craig W. Holden

For undergraduate and graduate courses in corporate finance or financial management. This book focuses on active learning by teaching students how to build and estimate financial models using Excel so... This description may be from another edition of this product.

• Format: Paperback
• Language: English
• ISBN: 0132079909
• ISBN13: 9780132079907
• Release Date: January 2008
• Publisher: Pearson Prentice Hall
• Length: 235 Pages
• Weight: 0.15 lbs.
• Dimensions: 0.6" x 8.5" x 10.8"

Customer Reviews

Good but too short

This book is good but, it needs more explanation and some teoric references. BUt if you wanna have an excel guide with your Bodie investments book this is what you need. MY

Excellent way to learn about building spreadsheets for investment analysis

I am a huge fan of this book for several reasons. First, I believe that Professor Holden is absolutely right in trying to move finance from a calculator driven study to spreadsheets. Everyone uses spreadsheets in their work, NOT calculators. So, it is not only useful to use spreadsheets, but to learn how to build them. Another very nice thing about this book is that it uses plain vanilla Excel. You don't need any special add-ins. This allows the user to understand what Excel on its own is capable of (and that is quite a bit). It also means the student doesn't have to buy anything more than this book to get everything the author intended. I also like the way he takes the student along. You build the first spreadsheet with the steps he provides, and then you modify that to make the second, and then the third, and so on. You get to see the increasingly powerful things one can do with Excel. The graphs he has one build also help because it allows you to change different values and immediately see how it changes the graph. This is immensely important in helping the student develop intuitions about how the changing of this or that number affects the topic of the spreadsheet. This book on Investments begins with bonds. You learn how to read bond listings, do bond pricing, learn about the concept of duration, bond convexity, using the yield curve, dynamics of the US yield curve, linear models of the yield curve, and something called the Vasicek Model. Part 2 focuses on topics related to stocks. Portfolio optimization, diversification and lowering risk, life-cycle financial planning, dividend discount models, and the Du Pont System of Ratio Analysis. Part 3 deals with Options and Futures. Option payoffs and profits, option trading strategies, put-call parity, binomial option pricing, Black Scholes option pricing, Spto-Futures Parity (cost of carry), and interest rate partiy. The notation in the book is compatible with the Zvi Bodie book on Investments, but the CD has key chapters in the notation compatible with the Francis, Haugen, Jones, Reilly, and Sharpe texts. The CD also supplies databases for the yield curve spreadsheets. Terrific book for finance classes or as a supplement to your own study.

Excellent fundamental Modeling text.

Craig W. Holden's "Excel Modeling in Investments" came as an excellent surprise to me when I received a faculty review copy from the publisher. I have long used Simon Benninga's competing text "Financial Modeling in Excel" to teach undergraduate and graduate financial modeling courses, however, I seriously am considering switching to Holden's EMinI. Holden correctly emphasizes discounting a bond's value on various yield curves, rather than a linear or fixed discount rate as in Benninga. Holden has some flaws, his layouts for binomial pricing models are inefficient for adapting to trinomial converging tree models, for example, but Holden is the only serious rival to Benninga in coverage of the major topics of modeling. Holden covers bonds, duration, convexity, portfolio optimization, financial planning, and the leading option pricing models. In addition, he covers cost of carry in the context of spot and futures prices, and interest rate parity. Holden does not cover Value at Risk, cheapest to deliver bonds, and has little on Visual Basic. However he does cover the Vasicek and Cox-Ingersoll-Ross interest rate models more thoroughly than Benninga. Holden's flaws are many: there is no index, and this is a text that cries out for one. Similarly, the footnotes are inadequate, and a broad "Further Reading" and bibliography should be here. Holden also suffers from being written as a companion text to popular finance textbooks such as Bodie Kane and Marcus, however, one always has the impression that the author was looking more to maximizing the market share of the text than really selecting the best chapters. We can only hope that Holden follows the better angels of his nature and includes more detail and chapters, perhaps on Monte Carlo simulation, VaR, and VBA programming. The CD-Rom, while helpful, is a little light, but this is the author's intention for he wishes students to build their own models from scratch. In summary, I heartily recommend this book coupled with Benninga's more detailed "Financial Modeling in Excel" and find the practical emphasis indispensable for those working with or using a theoretical text such as Bodie Kane and Marcus. For those students that want careers in finance, this book is fundamental, primary, and necessary, for it emphasizes practical skills you will be executing everyday at a much higher level in a bank or asset management firm. Master these skills and models now before beginning your career and the acceleration of your promotions responsibilities will exceed those of your peers quickly.

A Good Supplement for Investments Classes

This book is not an end unto itself, but it is an excellent companion to the leading investment finance texts.The book is oriented toward the graduate student (MBA), and the texts it parallels are the most popular MBA texts on the market. Whether you are using texts by any of the major publishers, the author Craig Holden has created these spreadsheeting materials to work directly with the text. It paralles directly the most popular text, but then it also comes with outlines and notation changes to fit with the other major texts.The update (this is the second edition) is useful, but the first edition(s) were actually separate books. I preferred the separate book for each major author, but Holden is very succinct in his ability to tie this book to them all without the need for two or three different versions.Holden also wrote, and Prentice Hall published, versions that tie to undergraduate investments texts, as well as both graduate and undergraduate corporate finance books.In the first edition, the accompanying CD had an interactive version of the book. Unlike that first edition, the CD with this second edition does not carry the entire contents of the book; but that is OK, since it is easier to read the book than watch the CD on a computer screen. However, Holden makes very few actual spreadsheets available on the CD. So, except for print versions in the text, if you want to see the models, you have to build the models.The book supports ONLY Excel. Personally, I always thought Lotus 1-2-3 was a better product and I would love to see such a book to support Lotus, but the world has gone Microsoft, and Excel is ubiquitous.