Information on Excel 2007 and Excel 2010 relevant for typical finance applications

Purpose Excel 2007 Excel 2010 Comment

Cumulative distribution func- NORMDIST(x,µ,σ,1) NORM.DIST(x;µ;σ;1)
tion for normal distribution
Cumulative distribution func- NORMSDIST(x) NORM.S.DIST(x;1)
tion for standard normal dis-
tribution
Probability density function NORMDIST(x,µ,σ,0) NORM.DIST(x;µ;σ;0)
for normal distribution
Probability density function NORM.S.DIST(x;0)
for standard normal distribu-
tion
Percentile from normal distri- NORMINV(p,µ,σ) NORM.INV(p;µ;σ)
bution
Percentile from standard nor- NORMSINV(p) NORM.S.INV(p)
mal distribution
Random draw from normal NORMINV(RAND(),µ,σ) NORM.INV(RAND();µ;σ)
distribution
Random draw from standard NORMSINV(RAND()) NORM.S.INV(RAND()) More precise methods exist
normal distribution
Vector/dot product SUMPRODUCT SUMPRODUCT
Transpose matrix TRANSPOSE TRANSPOSE
Multiply matrices MMULT MMULT
Invert (square) matrix MINVERSE MINVERSE

Note that the functions TRANSPOSE, MMULT, and MINVERSE have an array (vector or matrix) as output. First highlight an array of cells of the
appropriate dimension, then type in the formula, and simultaneously press CTRL, SHIFT, and ENTER. (The same is true if you want to add or subtract
two vectors or two matrices of the same dimensions.)

1
 Purpose Excel 2007 Excel 2010 Comment
Arithmetic mean AVERAGE AVERAGE
Geometric mean GEOMEAN GEOMEAN To obtain geometric average return apply GEOMEAN
to time series of gross returns (one plus rate of return)
and afterwards subtract one
Sample variance VAR VAR.S
Sample standard deviation STDEV STDEV.S
Sample skewness SKEW SKEW
Sample kurtosis KURT KURT
Sample covariance COVAR COVARIANCE.S Using COVAR, you should multiply with T /(T − 1)
where T is the number of observations
Sample correlation CORREL CORREL

You can perform various statistical procedures using the Data Analysis ToolPak in Excel. For example you can apply this to construct a histogram, to
quickly obtain numerous summary statistics, or to perform a regression. For optimization problems, the Solver in Excel is often useful. When installed,
both Data Analysis and Solver are available under the ‘Data’ tab. Before first use, you have to activate Analysis ToolPak and Solver. On Windows pc’s
do this:

• In Excel 2007 click the ‘Office’ button at the top-left, then choose the ‘Excel Options’ button at the bottom of the dialog. In the Options screen,
click ‘Add-ins’ from the list on the left, after which you can see the active and inactive add-ins. Near the bottom of this window, pick ‘Excel Add-Ins’
from the ‘Manage’ box and click OK. The Add-Ins dialog will open. Here, you can select the check box next to the add-ins you want to install.
Click OK.

• In Excel 2010 you can install it by going to the ‘File’ tab and select ‘Options’. In the pop-up window select ‘Add-Ins’ on the left after which you can
see the active and inactive add-ins. Near the bottom of this window, you see Excel Add-ins already selected in a drop-down menu labeled Manage.
Click the Go button next to this drop-down. The Add-Ins dialog will open. Here, you can select the check box next to the add-ins you want to
install. Click OK.

You can change the language in Excel 2010 as follows: With an Excel file open, choose Options from the File tab. Pick Language on the left and make
your choice of language.