Product Overview

Financial Toolbox™ provides functions for mathematical modeling and statistical analysis of financial data. You can optimize portfolios of financial instruments, optionally taking into account turnover and transaction costs. The toolbox enables you to estimate risk, analyze interest rate levels, price equity and interest rate derivatives, and measure investment performance. Time series analysis capabilities let you perform transformations or regressions with missing data and convert between different trading calendars and day-count conventions.

With Financial Toolbox software, you can do the following:

• Asset allocation, cash flow analysis, object-oriented portfolio optimization, and risk analysis

• Basic SIA-compliant fixed-income security analysis

• Basic Black-Scholes, Black, and binomial option pricing

• Financial time series, date math, and calendar math

• Basic GARCH estimation, simulation, and forecasting

• Regression and estimation with missing data

• Technical indicators and financial charts

This chapter uses MATLAB^® to review the fundamentals of matrix algebra you need for financial analysis and engineering applications. It contains these sections:

• Using Matrix Functions for Finance

  Reviews Key Definitions and some matrix algebra fundamentals, such as Referencing Matrix Elements and Transposing Matrices.

• Matrix Algebra Refresher

  Provides a brief refresher on using matrix functions in financial analysis and engineering

• Function Input and Output Arguments

  Describes acceptable formats for providing data to MATLAB and the resulting output from computations on the supplied data.

This material explains some MATLAB concepts and operations using financial examples to help get you started.

Getting Started

Expected Background

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