This course focuses on an alternative method of implementing a two-dimensional binomial tree compared to the traditional method of building a binomial tree in excel presented in most option pricing text books.   The alternate approach is based on the techniques documented by Professor Mark Broadie at Columbia Business School as part of his coursework in Security Pricing and Computational Finance courses at Columbia University and allows us to extend a simple 3 step tree to a  50 – 100 step option pricing tree in a few minutes.

The course starts with pricing European calls and put options, followed by pricing american options and closes by reviewing option pricing for Knock out and Knock in (Sudden Death). We also review the special case of a down and in option.

Options pricing – Using binomial trees to price options in a spreadsheet

Options Pricing – Pricing Call Options – Option pricing spreadsheet – Binomial trees

Options Pricing – Pricing American Options – Calls and Puts – Spreadsheet implementation – Binomial trees

Options Pricing – Pricing Put Options – Option pricing spreadsheet – Binomial trees

Options pricing–Exotics Options–Pricing a Capped Call–Excel implementation – Binomial trees

Options pricing – Pricing Knockout exotic options – Sudden Death Options – Down and out call options

Options Pricing – Binomial Trees – Pricing Sudden death Options – Down and in call options

If you would like to purchase and download the excel examples covered in this course, please checkout our online finance course store for our pdf course download and example excel spreadsheets and templates.

If you are beginner and would like to see more details about Options and Derivatives or Options pricing, please see the following product oriented courses available for free.

Options Crash Course for dummies

Options & Derivatives Products

Advance Options & Derivatives Crash course

Options Pricing reference

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  • Non Print version – $29.99
  • Print version – $39.99

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Course Title

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ICAAP Sample Report Template & Executive Summary

Course Contents

Demo Bank Ltd. – Sample ICAAP Credit Report
1.          Methodology

    i.            Overview
    ii.           Approach – Credit Risk Capital Allocation
    iii.          Approach – Market Risk Capital Allocation
    iv.          Approach – Interest Rate Mismatch Capital Allocation
    v.           Approach – Liquidity Risk Capital Allocation
    vi.          Approach – Concentration Risk Capital Allocation
    vii.         Approach – Operational Risk Capital Allocation
    viii.        Approach – Reputational and Legal Risk Capital Allocation
    ix.          Approach – Strategic Risk Capital Allocation
    x.           Approach – Other Risk Factors

2.          Risk Aggregation

    i.            Credit Risk
    ii.           Market Risk
    iii.          Operational Risk
    iv.          Liquidity Risk
    v.           Interest Rate Mismatch Risk
    vi.          Concentration Risk
    vii.         Aggregation

3.          Credit Portfolio Review

    i.            Portfolio Composition
    ii.           Customer Base
    iii.          Maturity
    iv.          Concentration

4.          Internal Capital Adequacy

    i.            Summary of Results
    ii.           Credit Risk Capital Adequacy – Baseline Capital
    Iii.          Credit Risk Capital Adequacy – Internal Ratings and Rating Transitions
    iv.          Putting It Together – Rating Transitions and Profitability Analysis
    v.           Worst Case Provisioning
    vi.          Infection Ratios
    vii.         Using DPD Analysis for Projections
    viii.        Additional Supporting Capital Required
    ix.          Best Case Provisions
    x.           Transition Matrices by Industry and Amount
    xi.          Rating Grade Transitions

5.          ICAAP Assumptions

    i.            Model Parameter Assumptions

6.          Data Sources
Table of Figures 

Number of pages


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1.64 MB

Course Title Buy Print or Non Print Version
Calibration of CIR Model Example
Duration Convexity Example
Monte Carlo Simulation –  Commodity – Example
Monte Carlo Simulation – Currency – Example
Monte Carlo Simulation – Equity – Example
Pricing Options – Black Scholes Example
Pricing Options – Binomial Tree Example – Traditional Approach
Portfolio Risk Metrics

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  • Print version – $11.99

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Course Title

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Corporate Finance – First Course – Includes case study
Ratio Analysis – Includes 2 case studies

Course Contents

Ratio Analysis

1. Understanding the Language

    i.            Insolvency
    ii.           Fixed & Variable Costs and Cost Functions
    iii.          Dividends
    iv.          Net Working Capital
    v.           Marketable Securities
    vi.          Debt
    vii.         Stakeholders
    viii.        Managerial Efficiency (ME)
    ix.          Fundamental Analysis

2. Introduction to Ratios

    i.            Ratios – Comparative Analysis
    ii.           The many faces of ratio analysis

3. Liquidity, Leverage, Profitability and Productivity

    i.            Liquidity
    ii.           Leverage
    iii.          Productivity
    iv.          Profitability

Case Study 1 – Office Depot

1. Overview

2. Financial Condition Review

3. Ratios – Quick Reviews

    i.           Leverage Ratio
    ii.          Productivity or Turnover Ratio
    iii.          Profitability Ratio

4. Industry review and a first look at ratios

    i.            Industry Analysis
    ii.           Liquidity Ratios
    iii.          Leverage Ratios
    iv.          Productivity Ratios
    v.           Profitability Ratios

Case Study 2 – Staples & Office Depot: Comparative Ratio Analysis

1. Staples – Overview
2. Financial Condition Review
3. Liquidity Ratios – Comparison

    i.            Current Ratio
    ii.           Quick Ratio

4. Leverage Ratios

    i.            Debt to Equity Ratio
    ii.           Debt to Total Assets
    iii.          Times Interest Earned (Coverage) Ratio
    iv.          Fixed Charge Coverage Ratio
    v.           Productivity Ratios

5. Profitability Ratios

    i.            Gross Profit Margin
    ii.           Operating Profit Margin
    iii.          Net Profit Margin
    iv.          Return on Assets (ROA)
    v.           Return on Equity (ROE)
    vi.          Basic Earning Power Ratio


No. of pages


File size

1.08 MB

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Master Class: Ratio Analysis: Liquidity, Leverage, Profitability, Productivity: Course Guide

Master Case: Office Depot: Ratio Analysis

Master Case: ODP and Staples: Comparative Ratio Analysis

Course Details


  • Non Print version – $8.99
  • Print version – $11.99

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Course Title

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Corporate Finance – First Course – Includes case study
Ratio Analysis – Includes 2 case studies

Course Contents

Session Zero – Learning Objectives

Session I – Financial Concepts

1. Definitions

    i. Operating Cycle
    ii. Books
    iii. Liquidity
    iv. Financial Structure
    v. Maturity

2. Forms of Ownership

    i. Sole Proprietor
    ii. Partnerships
    iii. Corporations
    iv. Limited Liability Companies (LLC’s)

3. Financial Statements

4. The Balance Sheet

5. The Income Statement

6. Statement of Cash Flows

7. The Accounting Notes

Session II – Review of Financial Statements

1. Assets

    i. Current assets
    ii. Property Plant & Equipment

2. Depreciation

3. Liabilities

    i. Current Liabilities ii. Long Term Liabilities

4. Net working capital

5. Equity

    i. Shares
    ii. Authorized Shares
    iii. Issued Shares
    iv. Treasury Shares
    v. Preferred Shares
    vi. Common Stock
    vii. Retained Earning
    viii. Bankruptcy

6. Income Statement

Session III – Risk and Return

1. Risk & Reward

    i. Important Points to remember

2. Return

    i. Return on Equity ii. Return on Invested Capital & ROE iii. Payback period

Session IV – Time Value of Money: An Overview 1. Discount Rate

    i. Compounding

2. Time Value of Money

    i. Examples

3. Present Value in Action 4. Internal Rate of Return (IRR)

    i. Internal Rate of Return (IRR) and comments

Session V – Opportunity Cost and Cost of Capital

1. Opportunity Cost & Cost of Capital

    i. Scenario 1 – Understanding Opportunity Cost
    ii. Scenario 2 – Understanding Cost of Capital

2. Weighted Average Cost of Capital (WACC)

Session VI – Case Study: ELECTRONIC ARTS

1. Case Study

2. Exhibits


No. of pages


File size

1.64 MB

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Corporate Finance: First Course

Course Details


  • Non Print version – $27.99
  • Print version – $29.99
  • EXCEL Example – $19.99

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Asset Liability Management – Crash Course
Asset Liability Management – Crash Course – EXCEL Examples

Course Contents

1. Introduction
2.Duration and Convexity
3. Value at Risk (VaR)

  • Variance Covariance Approach
  • Historical Simulation Method

4. ALM Risk Measurement Tools

  • Fall in Market Value of Equity
  • Earnings at Risk
  • Cost to Close
  • Rate Sensitive Gap
  • Price Sensitive Gap
  • Liquidity Gap
  • Net Interest Income (NII) at Risk
  • Duration Gap Analysis

5. Applications

  • Bank
  • Duration matching/ immunization
  • Pension Funds and Insurance
  • Portfolio dedication

6. Other Liquidity Risk Measurement Tools

  • Setting limits for liquidity risk
  • Cash flow mismatch or gap limits
  • Maturity Limits
  • Target Liquid Reserves
  • Concentration Limits
  • Contingent liability limit
  • Review
  • Exception handling
  • Contingency Funding Plan
  • General requirements for a liquidity contingency plan
  • Specific requirements for a liquidity contingency plan
  • Liquidity enhancement tactics
  • For Systemic crisis
  • For company specific crisis

7. Liquidity Management

  • Liquidity Ratios and Analysis
  • Current Ratio
  • Quick Ratio
  • Unused lines of credit
  • Borrowing/ Debt-to-Equity Ratio
  • Net Working Capital Ratio
  • Loan-to-Deposit Ratio
  • Loan- to- Asset Ratio

Number of pages


File Size

1.41 MB

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Asset Liability Management – The ALM Crash course

Course Details


  • Non Print version – $4.99
  • Print version – $7.99
  • EXCEL Example – $9.79

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Course Title

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Calculating Value at Risk Includes case study
Calculating Value at Risk EXCEL Example

Course Contents

1. Introduction
2. VaR Methods

    a. Variance Covariance Approach
    b. Historical Simulation Method
    c. Monte Carlo Simulation
    d. Quick Review
    e. Implementing VaR

3. Methodology

    a.  Setting the Scene
    b.  Preliminary steps
    c.  VaR Approach Specific Steps
    d.  Scaling of the daily VaR

4. Caveats, Qualifications, Limitations and Issues
5. Case Study – Risk for the Oil and Petrochemical Industry

    a. A Framework for Risk Management
    b. Risk Policy
    c. Good Data and a First Look at Models
    d. Models and Tools
    e. Metrics and Sensitivities
    f. Limits and Control Process
    g. Conclusion

Number of pages


File Size

1.5 MB

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Master Class: Calculating Value at Risk (VaR): Introduction