Install Windows on external HD only (for MBA)

I will be taking a computer programming course in college and somehow I think I'll have to install Windows (probably 7). My MBA is the 2013 model with 128GB SSD and 4GB RAM, and the SSD has 60 GB remaining. I'm not the biggest fan of Windows (W7 is the only one I actually like, I hate all the others except 95.) I do have an external Western Digital 1TB USB 3 hard drive that I currently use for Time Machine. So 1) Can I partition the external drive to use Windows on it, and how do I partition it? And 2) Will I be able to install Windows ONLY on the external drive and boot Windows just from there so that I only have OS X on my MBA?? I just don't want to waste precious SSD space on an OS that I don't really care for so I want to use it from the external HD. ONE MORE QUESTION: since it's a USB 3 drive, will Windows perform fast on the drive if it's external??

Okay, thanks.
You said earlier, "You install VB on your internal drive and when you set it up choose the external as the location for the files." I can only click "install for all users on this computer." I have my drive plugged in but it doesn't say anything about installing on another disk.

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