Digital tools and financial analysis

Introduction

The modern world generates data at an incredible rate.  This has a profound impact on how businesses are run, how investors make their decisions, and how we apply financial theory to navigate the world. This course provides a first introduction to essential quantitative tools to take advantage of data available and to analyze data through the lenses of financial theory.  

To be ready for today’s competitive labor market and being able to quickly and precisely analyze and visualize data, students should master quantitative tools. Everyone uses software in the modern world, but this is not limited to spreadsheets such as Excel, OpenOffice or Google Sheets. Students give themselves a huge advantage if they learn to write programs -- to code.

In this course, students will therefore learn both to use spreadsheets (such as Excel, OpenOffice or Google Sheets), and elementary programming using R. R is today widely used in business, in general, and in the financial industry, in particular. It is a general programming language that also allows statistical analysis and handling of large datasets. R is open source, which has, at least, three advantages: it is a dynamic and evolving project with a huge amount of contributors around the world, there are extensive, freely available online resources, and it is free. R is a market leading programming language, and is used by e.g. NBIM (“Oljefondet”, Norges Bank Investment Management) and many financial institutions. 

Students will learn to use spreadsheets and elementary coding through analyzing a set of topical questions in finance using data and visualization techniques.  This course will be "hands-on" and prepare students to provide quantitative answers to question facing the organizations they are working for. This course is intended to be both fun and interesting. 

Students will develop basic skills that will be useful in their studies of finance, and later, in professional life. In most entry-level positions, ability to efficiently gather and process data is a crucial skill. Spreadsheets are widely used and ability to use spreadsheets fast and efficiently are expected by almost all employers. Programming skills are also expected by more and more employers. Combining programming skills with financial insight is important in the financial industry, in business in general, and in public administration. Below you find examples where programming is useful:

• Analysis of companies’ investment and finance decisions (this also applies to non-profit organizations)
• Data based analysis for portfolio and investment strategies in financial markets
• Analysis of big data sets in order to provide insight before making important decisions
• Automating processes relevant for buying and selling stocks, foreign exchange, and other securities
• Financial advice

Course content

1. Introduce interesting issues that are highlighted in finance
2. Understand the financial system and how different participants must relate to finance
3. Introduction to R and spreadsheets (Excel/OpenOffice/Google sheets)
   • Retrieve data for Excel and R. Use data for macroeconomics and financial markets
   • Process data in Excel and R. "Clean data", merge data, create new variables (e.g. returns on boxes)
   • Create figures and tables of data. Make simple summaries, such as averages and standard deviations
4. Apply Excel and R to problems. For example:
   • Compare wealth in different countries
   • Compare returns on various financial instruments, such as equities and bonds