## BA4005 Syllabus - Financial Modelling - 2021 Regulation Anna University

BA4005

FINANCIAL MODELLING

L T P C

3 0 0 3

COURSE OBJECTIVE:
• Making students to build financial models by including various fields of study viz Financial Management and Derivatives.

UNIT I

INTRODUCTION TO FINANCIAL MODELLING & BUILT IN FUNCTIONS USING SPREAD SHEETS

9

Introduction to Financial Modelling- Need for Financial Modelling- Steps for effective financial modelling-Introduction to Time value of money & Lookup array functions :FV,PV,PMT,RATE,NPER, Vlookup, Hlookup ,if, countifetc - Time value of Money Models: EMI with Single & Two Interest rates –Loan amortisation modelling-Debenture redemption modelling

UNIT II

BOND & EQUITY SHARE VALUATION MODELLING

9

Bond valuation – Yield to Maturity(YTM): Rate method Vs IRR method-Flexi Bond and Strip Bond YTM Modelling-Bond redemption modelling -Equity share valuation : Multiple growth rate valuation modelling with and without growth rates

UNIT III

CORPORATE FINANCIAL MODELLING

9

Alt Man Z score Bankruptcy Modelling-Indifference point modelling – Financial Break even modelling -Corporate valuation modelling (Two stage growth)- Business Modelling for capital budgeting evaluation: Payback period ,NPV ,IRR and MIRR

UNIT IV

PORTFOLIO MODELLING

9

Risk ,Beta and Annualised Return –Security Market Line Modelling –Portfolio risk calculation (Equal Proportions)-Portfolio risk optimisation (varying proportions)-Portfolio construction modellingOption pay off modelling: Long and Short Call & Put options -Option pricing modeling (B-S Model)-Optimal Hedge Contract modelling

UNIT V

DERIVATIVE MODELLING

9

Option pay off modelling: Long and Short Call & Put options -Option pricing modeling (B-S Model)-Optimal Hedge Contract modelling

TOTAL: 45 PERIODS

COURSE OUTCOMES:
1. Develop fast, efficient and accurate excel skills
2. Design and construct useful and robust financial modelling applications
3. Recognize efficient financial budgeting and forecasting techniques
4. Familiarise the students with the valuation modelling of securities
5. The course establishes the platform for students to develop various portfolio models

REFERENCES:
1. Wayne L Winston,” Microsoft Excel 2016-Data Analysis and Business Modelling ”,PHI publications, (Microsoft Press),New Delhi,2017.
2. Chandan Sen Gupta, ”Financial analysis and Modelling –Using Excel and VBA” , Wiley Publishing House ,2014’
3. Craig W Holden,”Excel Modelling in Investments” Pearson Prentice Hall, Pearson Inc,New Jersey,5th Edition 2015
4. Ruzhbeh J Bodanwala , ”Financial management using excel spread sheet”,Taxman Allied services Pvt Ltd, New Delhi,3rd Edition 2015.