The Oxford Guide to Financial Modeling: Applications for Capital Markets, Corporate Finance, Risk Management and Financial Institutions

The essential premise of this book is that theory and practice are equally important in describing modeling. In it the authors try to strike a balance in their discussions between theories that provide foundations for models and the institutional details that provide the context for applications of the models. The book presents the models of stock and bond options, exotic options, investment grade and high-yield bonds, convertible bonds, mortgage-backed securities, liabilities of institutions -- the business model and the model. It also describes the applications of the models to finance. Furthermore, it relates the models to statements, risk management for an enterprise, and asset/liability management with illiquid instruments. The models are progressively presented from option pricing in the markets to firm valuation in following a format to emphasize the three aspects of a model: the set of assumptions, the model specification, and the model applications. Generally, modeling books segment the world of finance as investments, financial institutions, corporate finance, and securities analysis, and in so doing they rarely emphasize the relationships between the subjects. This unique book successfully ties the thought processes and applications of the models together and describes them as one process that provides business solutions. Created as a companion website to the book readers can visit www.thomasho.com to gain deeper understanding of the book's models. Interested readers can build and test the models described in the book using Excel, and they can submit their models to the site. Readers can also use the site's forum to discuss the models and can browse server based models to gain insights into the applications of the models. For those using the book in meetings or class settings the site provides Power Point descriptions of the chapters. Students can use available question banks on the chapters for studying.