Financial Modelling
| Module title | Financial Modelling |
|---|---|
| Module code | BEF3006DA |
| Academic year | 2023/4 |
| Credits | 15 |
| Module staff |
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.
Module aims - intentions of the module
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)
Intended Learning Outcomes (ILOs)
ILO: Module-specific skills
On successfully completing the module you will be able to...
- 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
On successfully completing the module you will be able to...
- 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
On successfully completing the module you will be able to...
- 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.
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)
Learning activities and teaching methods (given in hours of study time)
| Scheduled Learning and Teaching Activities | Guided independent study | Placement / study abroad |
|---|---|---|
| 40 | 110 |
Details of learning activities and teaching methods
| Category | Hours of study time | Description |
|---|---|---|
| Scheduled Learning and Teaching Activities | 14 | Masterclass/workshops |
| Scheduled Learning and Teaching Activities | 18 | Online lectures and webinars |
| Scheduled Learning & Teaching activities | 6 | Guided Revision |
| Guided Independent Study | 112 | Reading and research, web-based activities |
Formative assessment
| Form of assessment | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|
| Online Discussion | Online discussion contributions | 1-14 | Online discussion feedback from peers and lecturer |
| Weekly Exercises | Weekly questions | 1-12 | Correct answers on ELE |
| Case Studies | case studies to be provided after the primary topic. | 1-14 | Feedback and suggested solutions provided on ELE |
Summative assessment (% of credit)
| Coursework | Written exams | Practical exams |
|---|---|---|
| 50 | 50 | 0 |
Details of summative assessment
| Form of assessment | % of credit | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|---|
| Exam | 50 | 1-hour written exam | 1-11 | |
| Applied Exercise/ Assignment | 50 | 2,000 words | 1-14 | |
| 0 | ||||
| 0 | ||||
| 0 | ||||
| 0 |
Details of re-assessment (where required by referral or deferral)
| Original form of assessment | Form of re-assessment | ILOs re-assessed | Timescale for re-assessment |
|---|---|---|---|
| Exam | 50% 1-hour written exam | 1-11 | Next available opportunity |
| Applied Exercise/Assignment | 50% 2,000 words | 1-14 | Next available opportunity |
Re-assessment notes
Defer – as a first time
Refer – capped at 40%
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
| Credit value | 15 |
|---|---|
| Module ECTS | 7.5 |
| Module pre-requisites | None |
| Module co-requisites | None |
| NQF level (module) | 6 |
| Available as distance learning? | Yes |
| Origin date | 28/02/19 |
| Last revision date | 06/12/2022 |
