What is the DAY Function? The DAY Function is categorized under Excel Date/Time Function. In financial modeling, we often need to analyze time-series data such as revenue. For example, in a restaurant business, we might be interested in knowing which day of the week is the busiest or in finding out if there is a…
What is the DAYS360 Function? The DAYS360 Function in Excel is categorized under Excel Date/Time functions. This function helps to calculate the number of days between two dates, based on a 360-day year. As a financial analyst, the DAYS360 Function in Excel becomes useful in preparing reports such as an Aging schedule for debtors or…
What is the DATE Function? The DATE Function in Excel is categorized under Excel Date/Time Functions. It is the main function used to calculate dates in Excel. The DATE function is very useful for financial analysts because financial modeling requires specific time periods. For example, an analyst can use the DATE function in Excel in…
What is the AREAS Function? The AREAS Function in Excel is an Excel Lookup/Reference function. This function will take an Excel reference and return the number of areas that make up the reference. It is available starting from MS Excel 2007. Formula =AREAS(reference) The AREAS function uses the following argument: Reference (required argument) – This…
What is a Put Swaption? A put swaption, also referred to as a payer swaption, involves the buyer being given the opportunity to enter into a rate swap, acting as the floating-rate payer. The party selling the swaption is the floating rate receiver. Because it is an interest rate swap, it means that the buyer…
What is a Call Swaption? A call swaption, also known as a receiver swaption, is an option that allows the holder to take part in a private tax rate swap. All swaptions are conducted over-the-counter (OTC), meaning they are not standardized contracts. In order to participate in a call swaption – or any swaption –…
What is the ISFORMULA Function? The ISFORMULA Function is categorized under Excel Information functions. It will test a specified cell to see if it contains a formula. If it does contain a formula, then it will return TRUE. If not, then it will return FALSE. The ISFORMULA function was introduced in MS Excel 2013. The purpose…
What are Forward Commitments? A forward commitment refers to a contractual agreement between two parties to carry out a planned transaction, i.e., a transaction in the future. Forward commitments differ in terms of their structure and the exact contracting mechanism. Some common forward commitments are forward contracts, futures contracts, and swaps. How They Work When…
What is the Put-Call Ratio (PCR)? The put-call ratio (PCR) is an indicator used by investors to gauge the outlook of the market. The ratio uses the volume of puts and calls over a determined time period on a market index to determine market sentiment. It can additionally be used for individual securities by looking…
What is Roy’s Safety-first Criterion? Roy’s safety-first criterion is a risk management technique used by investors to compare and choose a portfolio based on the criterion that the probability of a portfolio’s return dropping below a threshold level return is reduced. In Roy’s safety-first criterion, the optimal portfolio is one that minimizes the probability of…
