Financial Modeling with Crystal Ball and Excel

Acknowledgments.

About the Author.

Chapter 1: Introduction.

Financial Modeling.

Risk Analysis.

Monte Carlo Simulation.

Risk Management.

Benefits and Limitations of Using Crystal Ball.

Chapter 2: Analyzing Crystal Ball Forecasts.

Simulating A 50–50 Portfolio.

Varying the Allocations.

Presenting the Results.

Chapter 3: Building a Crystal Ball Model.

Simulation Modeling Process.

Defining Crystal Ball Assumptions.

Running Crystal Ball.

Sources of Error.

Controlling Model Error.

Chapter 4: Selecting Crystal Ball Assumptions.

Crystal Ball’s Basic Distributions.

Using Historical Data to Choose Distributions.

Specifying Correlations.

Chapter 5: Using Decision Variables.

Defining Decision Variables.

Decision Table with One Decision Variable.

Decision Table with Two Decision Variables.

Using OptQuest.

Chapter 6: Selecting Run Preferences.

Trials.

Sampling.

Speed.

Options.

Statistics.

Chapter 7: Net Present Value and Internal Rate of Return.

Deterministic NPV and IRR.

Simulating NPV and IRR.

Capital Budgeting.

Customer Net Present Value.

Chapter 8: Modeling Financial Statements.

Deterministic Model.

Tornado Chart and Sensitivity Analysis.

Crystal Ball Sensitivity Chart.

Conclusion.

Chapter 9: Portfolio Models.

Single-Period Crystal Ball Model.

Single-Period Analytical Solution.

Multiperiod Crystal Ball Model.

Chapter 10: Value at Risk.

VaR.

Shortcomings of VaR.

CVaR.

Chapter 11: Simulating Financial Time Series.

White Noise.

Random Walk.

Autocorrelation.

Additive Random Walk with Drift.

Multiplicative Random Walk Model.

Geometric Brownian Motion Model.

Mean-Reverting Model.

Chapter 12: Financial Options.

Types of Options.

Risk-Neutral Pricing and the Black-Scholes Model.

Portfolio Insurance.

American Option Pricing.

Exotic Option Pricing.

Bull Spread.

Principal-Protected Instrument.

Chapter 13: Real Options.

Financial Options and Real Options.

Applications of ROA.

Black-Scholes Real Options Insights.

ROV Tool.

Summary.

Appendix A: Crystal Ball’s Probability Distributions.

Appendix B: Generating Assumption Values.

Appendix C: Variance Reduction Techniques.

Appendix D: About the Download.

Glossary.

References.

Index.