Chapter 18 Decision Tree and Microsoft Excel Approach for Option Pricing Model
PROCEDE 2014 Using excel for decision making
Transcript of PROCEDE 2014 Using excel for decision making
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Using Excel for
Decision
Making Tips and tricks to make data
useful and readable
Presented by: Mark Newton -LBPSB
October 22, 2014
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Framework
Introduction
The basics – Speaking a common
language
3D references – Linking between
worksheets and workbooks
Logic = asking questions
Conditional formatting – visualizing key
elements making data results jump out
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Introduction – Data collection
Everything is data
Decision making needs to be based on
real information
Need models to collect data
What
When – For how long?
How?
Need tools to interpret collected data
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Introduction - Excel
Excel is Microsoft’s spreadsheet solution
It is exceptionally strong in complex math
Has strong built-in tools to:
Link between different data locations
Allow for logic to limit results
Highlight specific results
Visualize values
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The Basics:
Versions
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The Basics
Versions 2007, 2010, 2013
Ribbon Navigation
Workbook vs. worksheet
Tables vs. Ranges
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2007
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2010
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2013
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Ribbon (2010)
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The Basics:
Vocabulary
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Workbook
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Worksheet
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Tables
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Ranges
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3D
References
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3D references
Using Excel involves referencing locations
in a work sheet:
Horizontal (alphabetic)
Vertical axis (numeric)
Any cell on a given worksheet has an
address letter/number
Ex. C5
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3D references A 3D reference adds another location to the
cell reference Another worksheet
Another workbook
New cell address includes Location
Vertical axis
Horizontal axis
Example 1 Sheet2!B2
Example 2 '[WorkbookName.xlsx]Worksheet'!$C$2
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Logic
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LOGIC
Conditional situations “What if”
Used to ask questions
Limits values used in answers
Can be used with other functions
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LOGIC
=if(test, true, false)
“and” + “or” layers criteria
=countif(range, criteria)
=sumif(range, test, sum-
range)
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Conditional
formatting
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Conditional Formatting
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Used to highlight specific items on a table
or in a range
Can change colour, fill, and/or border
Require a “question” to activate
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Graphing
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Graphing
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Use colour and shapes to visualize select
data
Many different forms
Selection based on need and data
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Thank you
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