# Financial Modelling

## Module description

This module is intended for Financial Services Professional Degree Apprenticeship students who want to develop the knowledge and tools to implement financial models using Excel.

This is an applied module that covers the implementation of quantitative financial models widely used in financial institutions such as investment banks, mutual funds and hedge funds, and non-financial corporations.

The module covers of various topics in finance drawn from investment analysis, corporate finance, fixed-income analysis, risk management and international finance. The module’s emphasis is on the practical application of finance theory, in which you will work through real-world problems using Excel.

## Full module specification

Module title: Financial Modelling BEF3006DA 3 2023/4 15 7.5 None None

## Module aims

This module aims to equip you with the knowledge and tools to implement financial models using Excel. The course introduces you to the general principles of building financial models, as well as several specific financial modelling tools, including regression analysis, statistical functions, matrix functions, optimisation and simulation. These methods are applied to a range of practical problems in finance, including financial statement modelling, yield curve modelling, risk management and exchange rate modelling. The course’s emphasis is on the practical application of the theory, with lectures on each topic followed by in-depth practical sessions in which you will work through real-world problems using Excel. The module will also introduce you to using VBA (Microsoft’s programming language) in financial modelling.

Problem Solving and Decision Making (S22)

Products and Services (K9)

Systems and Processes (K13, 14)

Innovation and Creativity (B41)

Developing self and others (S31)

## ILO: Module-specific skills

• 1. Communicating and Networking (S24) Explain the objectives of financial modelling and the characteristics of financial data
• 2. Innovation and Creativity (B41) Download financial data from the internet for a range of securities, including stocks, bonds and currencies
• 3. Systems and Processes (K13,14) Undertake a range of financial and statistical calculations in Excel
• 4. Developing self and others (S31) Estimate the cost of capital for a company
• 5. Build a financial statement model and use this to estimate the fair value of a company
• 6. Estimate the expected yield of a corporate bond and construct a yield curve
• 7. Evaluate the risk of an investment portfolio

## ILO: Discipline-specific skills

• 8. Products and Services (K9) Effectively undertake complex financial modelling and research, and analysis using appropriate tools.
• 9. Problem Solving and Decision Making (S22) Design a range of different strategies and test their effectiveness

## ILO: Personal and key skills

• 10. Systems and Processes (K13,14) Develop proficiency in the relevant IT skills (Excel) and Financial Service specific software/systems, as required to deliver the role outcomes
• 11. Demonstrate a good understanding of processes and portfolio management principles and how they are utilised within their area
• 12. Developing self and others (S31) Develop an ability to adapt their approach positively to manage priorities as circumstances change, new tasks need to be done or when business requirements change.

## Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad
40110

## Details of learning activities and teaching methods

CategoryHours of study timeDescription
Scheduled Learning and Teaching Activities14Masterclass/workshops
Scheduled Learning and Teaching Activities18Online lectures and webinars
Scheduled Learning & Teaching activities6Guided Revision
Guided Independent Study112Reading and research, web-based activities

## Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Online DiscussionOnline discussion contributions1-14Online discussion feedback from peers and lecturer
Weekly ExercisesWeekly questions1-12Correct answers on ELE
Case Studiescase studies to be provided after the primary topic.1-14Feedback and suggested solutions provided on ELE

## Summative assessment (% of credit)

CourseworkWritten examsPractical exams
50500

## Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
Exam501-hour written exam1-11
Applied Exercise/ Assignment502,000 words1-14
0
0
0
0

## Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Exam50% 1-hour written exam1-11Next available opportunity
Applied Exercise/Assignment50% 2,000 words1-14Next available opportunity

## Re-assessment notes

Defer – as a first time

Refer – capped at 40%

## Syllabus plan

• Introduction to Excel functions
• Financial Modelling using Balance Sheets
• Corporate finance and Valuation (computations of Enterprise Value & WACC)
• Yield Curve Modelling
•  Portfolio Models (Computing Efficient Portfolios and various statistics with the use of Monte Carlo methods)

## Indicative learning resources - Basic reading

• Benninga, S. (2014) Financial Modelling, 4th edition, Massachusetts: MIT Press.
• Hands-On Financial Modeling with Excel for Microsoft 365 - Second Edition by Shmuel

Yes

28/02/19

06/12/2022