In this Capstone you will recommend a business strategy based on a data model you’ve constructed. Using a data set designed by Wharton Research Data Services (WRDS), you will implement quantitative models in spreadsheets to identify the best opportunities for success and minimizing risk. Using your newly acquired decision-making skills, you will structure a decision and present this course of action in a professional quality PowerPoint presentation which includes both data and data analysis from your quantitative models.
Wharton Research Data Services (WRDS) is the leading data research platform and business intelligence tool for over 30,000 corporate, academic, government and nonprofit clients in 33 countries. WRDS provides the user with one location to access over 200 terabytes of data across multiple disciplines including Accounting, Banking, Economics, ESG, Finance, Insurance, Marketing, and Statistics.
This course is part of the Business and Financial Modeling Specialization
Wharton Business and Financial Modeling Capstone
Offered By
About this Course
4.6
294 ratings
Skills you will gain
Summary StatisticsFinancial ModelingDiversification (Finance)Investment
Syllabus - What you will learn from this course
Week
11 hour to complete
Getting Started
Welcome! This opening module was designed to give you an overview of the Business and Financial Modeling Capstone, in which you will be working with historical financial data to calculate individual returns and summary statistics on those returns. The project has multiple steps, which are outlined below in the "Project Prompt", and culminates in a recommendation for portfolio allocation that you will prepare a presentation on. You will draw on elements from all courses to complete this project, and you can use your final presentation as a work sample to improve your current job or even find a new one. Before moving on, complete the "Project Scope Quiz." The work you do this week enables you to understand the steps needed to successfully complete your final project.
3 readings, 1 quiz
3 readings
Project Description - Read me first!10m
Project Prompt10m
Historical Stock Data10m
1 practice exercise
Project Scope Quiz10m
Week
23 hours to complete
Steps 1 and 2: Yahoo Finance
In this module, which correlates to Steps 1 and 2 in the Project Prompt, you'll be working with a historical data set to calculate performance data and to provide summary statistics on that data. These calculations will allow you to practice using Spreadsheets for financial calculations, and provides the foundational skills and numbers for the next steps of the project. First, you'll use the set to calculate daily returns on a set of securities. You'll then use your Spreadsheet skills to calculate summary statistics. You'll be given the opportunity to test your knowledge with a sample return to see if your calculations are correct. And you may want to refresh your recollection of the content from the Specialization with the lectures included here. The work you complete this week allows you to form the basis for comparing stock performance, which you will use in creating the investment portfolio for your final project as well as the comparison to the performance of a single stock.
6 videos (Total 101 min), 4 readings, 2 quizzes
6 videos
How Models are Used in Practice (Fundamentals of Quantitative Modeling)10m
Mathematical Functions (Fundamentals of Quantitative Modeling)20m
Navigating a Spreadsheet and Crafting Formulas (Introduction to Spreadsheets)19m
How To Build an Optimization Model: Hudson Readers Ad Campaign (Modeling Risk and Realities)13m
Data and Visualization: Graphical Representation (Modeling Risk and Realities)22m
4 readings
More on Close Price versus Adjusted Close Price10m
More on the Sharpe Ratio10m
Sample Returns Spreadsheet (AAPL)10m
PDFs of Refresher Video Slides10m
2 practice exercises
Daily Returns Quiz20m
Summary Statistics Quiz20m
Week
33 hours to complete
Step 3: Creating an optimal risky portfolio on the efficient frontier
In this module, you'll go beyond calculating simple returns to tackle the more advanced task of finding the minimum variance and "optimal risk portfolio" weights for a portfolio of selected securities (note, the "optimal risky portfolio" is also known as an "optimal portfolio" or "tangent portfolio"). You'll follow the tasks in Step 3 in the Project Prompt and use the resources below to calculate the portfolio weights for two securities that results in the portfolio with the minimum variance; then, you'll calculate the "optimal risky portfolio" on the efficient frontier for these same two securities, then for all 10 stocks in the pool. You'll be quizzed on your calculations and other insights that emerge from this exercise. The work you complete this week gives you practice in creating an optimal risky portfolio, which is a key component of your final project. Note: There are a number of resources available on the internet providing step-by-step instructions on how to use Excel to create an "optimal risky portfolio" on the efficient frontier given a certain set of available assets. We encourage you to attempt to use the skills you gained during the Specialization to work through these steps independently; you are, however, permitted to utilize third-party resources if you find it necessary. We've included some lectures from the underlying Specialization courses concerning Solver, optimization, and other relevant topics.
7 videos (Total 116 min), 5 readings, 1 quiz
7 videos
Present and Future Value (Fundamentals of Quantitative Modeling)15m
Optimization (Fundamentals of Quantitative Modeling)13m
Linear Programming (incl. Solver) (Introduction to Spreadsheets)9m
Optimizing with Solver, and Alternative Data Inputs (Modeling Risk and Realities)26m
Adding Risk: Managing Investments at Epsilon Delta Capital (Modeling Risk and Realities)18m
Using Scenarios for Optimizing Under High Uncertainty, Sensitivity Analysis and Efficient Frontier (Modeling Risk and Realities)15m
5 readings
Videos Explaining the Efficient Frontier and Optimal Risky Portfolio10m
More on Portfolio Variance10m
More on the Efficient Frontier10m
More on Short Selling10m
PDFs of Refresher Video Slides10m
1 practice exercise
The Minimum Variance and Optimal Risky Portfolio20m
Week
41 hour to complete
Step 4: Optional exercise using CAPM tables
The Capital Asset Pricing Model, or CAPM, is another tool used by investors to weigh the risks and rewards of potential investments. In this optional module covering Step 4 in the Project Prompt, you can use CAPM as a vehicle to further strengthen your financial modeling skills, including using regression concepts. You may revisit the Specialization lectures below touching on regression. To test whether you've grasped the concepts in the CAPM model, this module includes a short quiz. This assessment is formative, meaning your score will not count towards your final grade. The work you do this week may inform how you build the mixed asset portfolio of your final project, but it is not necessary to complete the final project.
3 videos (Total 30 min), 3 readings, 1 quiz
3 videos
Use of Regression Models (Fundamentals of Quantitative Modeling)15m
Correlation and Regression (Introduction to Spreadsheets)7m
3 readings
Video on the Capital Asset Pricing Model (CAPM)10m
More on the Capital Asset Pricing Model10m
PDFs of Refresher Video Slides10m
1 practice exercise
Capital Asset Pricing Model10m
4.6
47 Reviews25%
started a new career after completing these courses
31%
got a tangible career benefit from this course
25%
got a pay increase or promotion
Top Reviews
Good course that helps understand different considerations to take into account when creating models. Well laid out Capstone project to help understand portfolio diversification and Optimal Portfolio.
Really a great set of courses to understand and apply models to many different scenarios. I was able to use the skills I learned right away in my profession. Would definitely recommend.
Instructors
Richard Lambert
Professor of AccountingAccounting- Wharton School
Robert W. Holthausen
ProfessorAccounting
Don Huesman
Managing Director, Wharton OnlineInnovation Group- Wharton School
Richard Waterman
Professor of StatisticsStatistics-Wharton School
About University of Pennsylvania
The University of Pennsylvania (commonly referred to as Penn) is a private university, located in Philadelphia, Pennsylvania, United States. A member of the Ivy League, Penn is the fourth-oldest institution of higher education in the United States, and considers itself to be the first university in the United States with both undergraduate and graduate studies.
About the Business and Financial Modeling Specialization
Wharton's Business and Financial Modeling Specialization is designed to help you make informed business and financial decisions. These foundational courses will introduce you to spreadsheet models, modeling techniques, and common applications for investment analysis, company valuation, forecasting, and more. When you complete the Specialization, you'll be ready to use your own data to describe realities, build scenarios, and predict performance.
Frequently Asked Questions
When will I have access to the lectures and assignments?
Once you enroll for a Certificate, you’ll have access to all videos, quizzes, and programming assignments (if applicable). Peer review assignments can only be submitted and reviewed once your session has begun. If you choose to explore the course without purchasing, you may not be able to access certain assignments.
What will I get if I subscribe to this Specialization?
When you enroll in the course, you get access to all of the courses in the Specialization, and you earn a certificate when you complete the work. Your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile. If you only want to read and view the course content, you can audit the course for free.
What is the refund policy?
Is financial aid available?
More questions? Visit the Learner Help Center.
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