The University of Chicago Booth School of Business Tools for Business Analysis: Excel and Matlab Winter, 2012.

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1 The University of Chicago Booth School of Business Tools for Business Analysis: Excel and Matlab Winter, 2012 Kipp Martin 430 Harper Center (Office) Office Hours: Monday and Wednesday 2:00 PM - 3:00 PM and by appointment. Required Reading 1. VBA for Modelers: Developing Decision Support Systems with Microsoft Office Excel by Christian Albright, Cengage (Fourth Edition) ISBN Matlab: An Introduction With Applications by Amos Gilat, Wiley (Fourth Edition) ISBN Required Software 1. Excel 2007 (or later) with Visual Basic Editor. If you have Office 2007, then you have the Visual Basic Editor and do not need to purchase additional software. You need to be able to turn in files compatible with Excel All lab machines are equipped with Excel 2007 so you can always check if your files are compatible with the Booth standard. 2. MATLAB Release 2009 or later. This can be purchased from Campus Computers. Not cheap, but you can use this software in other Booth courses, especially finance. 3. GAMS Release 23.6 or later. This is available for free download at 1

2 Hardware Software Issues 1. You need a laptop for this course. Please bring it to class every week. 2. Mac OS X users I recommend you either get the Mac OS X Office 2011 version or get virtualization software such as VMware Fusion and run Office 2007 on the virtual machine. I am a Mac user and I have found this to be a good solution. The Mac Office prior to 2011 will not work. Course Objectives 1. Learn VBA (Visual Basic for Applications), a key tool that adds tremendous functionality to Microsoft Excel. This tool is widely used in business. 2. Learn to use MATLAB. This is an important program used in a number of other Booth courses. In the business world it is used extensively on Wall Street. 3. Develop skill in building realistic optimization models to support decision making. 4. Learn how to access and integrate data that reside in different locations and use these data as input to models. 5. Learn to use the General Algebraic Modeling System (GAMS) developed at the World Bank. This modeling system will allow students to formulate and solve realistic models using the input from Excel and MATLAB. Help Sessions: The course TA is Jun Liu (junliu518036@gmail.com). He will hold office hours on Wednesday from 4:45-5:45 PM pm in the Gleacher Center (Room to be announced), starting January 11 and continuing through March 14. Reading Outline Week 1 (January 5) Course policies, followed by a course overview and discussion of course relevance. An introduction to VBA. Model-based decision making architectures and components 2

3 Models and modeling languages Optimization solvers Data and instances Scripting languages and programming languages Using an IDE (Integrated Development Environment) The role of Excel and MATLAB Introduction to VBA The Excel VBA IDE Recording Macros The Excel object model this is critical! Reading: Chapters 1, 2, 3, and 4 in Albright. Week 2 (January 12) looping. Range object model, variables, logic, and VBA basics and tips Working with Range Object (Critical) Variables If constructs Looping Reading: Chapters 5 (skip 78-84), 6, and 7 in Albright. Week 3 (January 19) Collections, arrays, functions, and subroutines. Debugging and good programming practice Collections Workbooks Worksheets Arrays 3

4 More on Variables Subroutines Reading: Chapters 5 (78-84), 8 ( ), 9, and 10 in Albright. Week 4 (January 26) An Introduction to MATLAB The MATLAB IDE MATLAB as a calculator MATLAB built-in functions Matrices, linear equations, and linear algebra Working with arrays in MATLAB Script files Importing and exporting data Reading: Chapters 1-4 in Gilat. Week 5 (February 2) MATLAB functions, programming, structures, and cell arrays User functions Strings File IO Structures Cell arrays Reading: Chapters 6-7 in Gilat. Week 6 (February 9) Modeling with GAMS Calling GAMS with VBA and MATLAB Working with sets in GAMS Applications 4

5 Reading: Handouts Week 7 (February 16) Modeling Continued Using GAMS with Excel and MATLAB Application: Portfolio optimization VaR and CVaR Reading: Handout Week 8 (February 23) Working with External Data Relational databases SQL Reading: Chapter 14 in Albright. Week 9 (February 16) Using Web Services XML Web Services Week 10 (March 8) Building GUI in Excel and MATLAB. User Forms in MATLAB and Excel Callback functions Building an Excel GUI Building a MATLAB GUI Reading: Chapter 11 in Albright and MATLAB Handout Grading There is a midterm, homework sets, and a final exam. These components have the following weights. Midterm 30% Homework 30% Final Exam 40% 5

6 The midterm will be given in Week 6 (Thursday, February 9, 2012). The midterm will be given in the first half of the class. The final exam is Thursday, March 15 from 3-6 PM for Section 01 and Thursday, March 15, 6:30-9:30 PM for Section 81. The exams are closed book. You may bring one page (front and back) of notes for the midterm. You may bring two pages (front and back) of notes for the final. Please do not ask to have the midterm rescheduled or taken at another time. You may not take the midterm later in the class period. You must take the midterm promptly at the beginning of class. If you miss a midterm the weight is added to the final. I strongly suggest you do not miss the midterm. This is a very dangerous option. Attendance: I consider class attendance extremely important. I cannot cover everything on the exams that we cover in class. You are permitted to miss one class with no penalty. For each missed class thereafter you grade will be reduced by 2%. Your grade is determined using the percentages given above and is final. There is no opportunity for extra credit projects, etc. for raising a grade you do not find satisfactory. 6

7 Regrading Policy If you feel that your exam/homework was not graded correctly and wish to submit your work for regrading the following procedures must be followed. 1. All work must be submitted for regrading within two weeks from the date that it was returned. 2. You must indicate which questions you feel were graded incorrectly and clearly explain why you feel your answer is correct. This must be communicated in writing, not verbally. 3. Your entire exam/homework will be regraded with special emphasis on the questions you feel were not correctly graded. Thus, something that was overlooked before may now be discovered and your new adjusted score could be lower than before. 4. The amount of partial credit awarded on a question is a judgment call. As in baseball, judgment calls cannot be protested. Therefore you may not resubmit your work for the purpose of obtaining more partial credit. Other Issues: 1. Students in this class are required to adhere to the standards of conduct in the Booth Honor Code and the Booth Standards of Scholarship. The Booth Honor Code also requires students to sign the following Booth Honor Code pledge, I pledge my honor that I have not violated the Honor Code during this examination, on every examination, homework, and exam. 2. The Booth has established that the upper bound for a class grade point average is Please note that this is an upper bound, not a lower bound. Many students expect this 3.33 to be a lower bound also. It is not in this class. 3. This course may not be taken pass/fail. Audits are not allowed. 4. I will address you by your first name, please feel free to address me by my first name. If you do not feel comfortable with that, Professor Martin also works. 7

8 5. I consider attending class to be very important. If you have to miss more than two classes you should consider taking this course when you have more time. 6. Early Grades: if you are graduating this quarter and are making reasonable progress, I will assign a D for an early grade. You are required to take the final exam. After you take the final exam, I will adjust your grade. 7. Homework is due by 5:45 PM on the due date. There is a 50% penalty for one day late, i.e. by 5:45 PM the next day. If you request to be exempt from this for any reason (other commitments, travel, broken Internet connection, crashed hard drive, etc.) I will reply with the I realize this is going to make you understandably unhappy, but I have to establish a deadline and I have to treat everyone the same regardless of reason for homework being submitted late. Unless the deadline is enforced then it becomes meaningless. 8. Cell and Smartphone Use: You are kidding me, right? Don t even think about using one in class. Not once, not ever. Don t check your voice mail, don t text, and don t do whatever else you can do with those crazy, idiotic, ridiculous devices! The best place for all mobile phones is at the bottom of Lake Michigan. Okay, got it, no ***** cell phones! Same thing for Blackberry, iphone, Droid, and other similar devices. 8

9 Additional References 1. Mastering Matlab 7 by Hanselman and Littlefield, Prentice Hall, Graphics and GUIs with Matlab by Marchand and Holland, Chapman &Hall/CRC, Numerical Methods in Finance: A Matlab Based Introduction by Brandimarte, Wiley Excel 2007 the Missing Manual by Matthew MacDonald, O Reilly Good reference book on using Excel. 5. Excel 2007 Power Programming with VBA by Wallenbach, Wiley Developing Spreadsheet-Based Decision Support Systems: Using Excel and VBA for Excel by Şeref, Ahuja, and Winston, Dynamic Ideas Access 2007 Programming by Example with VBA, XML, and ASP by Korol, Wordware, Financial Modeling by Benninga, The MIT Press, Practical Financial Optimization: A Library of GAMS Models (The Wiley Finance Series) (Hardcover) 9