Description
Advanced Analytical Models is a large collection of advanced models with a multitude of industry and domain applications. The book is based on years of academic research and practical consulting experience, coupled with domain expert contributions. The Modeling Toolkit software that holds all the models, Risk Simulator risk simulation software, and Real Options SLS software were all developed by the author, with over 1,000 functions, tools, and model templates in these software applications. The trial versions are included in the accompanying DVD. The applications covered are vast. Included are Basel II banking risk requirements (credit risk, credit spreads, default risk, value at risk, etc.) and financial analysis (exotic options and valuation), risk analysis (stochastic forecasting, risk-based Monte Carlo simulation, optimization), real options analysis (strategic options, decision analysis), Six Sigma and quality initiatives, management science and statistical applications, and including everything in between, such as applied statistics, manufacturing, operations research, optimization, forecasting, and econometrics.
This book is targeted at practitioners who require the algorithms, examples, models, and insights in solving more advanced and even esoteric problems. This book does not only talk about modeling or illustrate basic concepts and examples; it comes complete with a DVD filled with sample modeling videos, case studies, and software applications to help you get started immediately. In other words, this book dispenses with all the theoretical discussions and mathematical models that are extremely hard to decipher and apply in the real business world. Instead, these theoretical models have been coded up into user-friendly and powerful software, and this book shows the reader how to start applying advanced modeling techniques almost immediately. The trial software applications allow you to access the approximately 300 model templates and 800 functions and tools, understand the concepts, and use embedded functions and algorithms in your own models. In addition, you can get run risk-based Monte Carlo simulations and advanced forecasting methods, and perform optimization on a myriad of situations as well as structure and solve customized real options and financial options problems.
Each model template that comes in the Modeling Toolkit software is described in this book. Descriptions are provided in as much detail as the applications warrant. Some of the more fundamental concepts in risk analysis and real options are covered in the author’s other books. It is suggested that these books, Modeling Risk (Second Edition): Applying Monte Carlo Simulation, Real Options Analysis, Stochastic Forecasting, and Portfolio Optimization (2010) and Real Options Analysis, Second Edition (2005), both published by John Wiley & Sons, be used as references for some of the models in this book. Those modeling issues that are, in the author’s opinion, critical, whether they are basic issues or more advanced analytical ones, are presented in detail. As software applications change continually, it is recommended that you check the author’s website (www.realoptionsvaluation.com) frequently for any analytical updates, software upgrades, and revised or new models.
