This course is part of the Business and Financial Modeling Specialization

4.6
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2,155 ratings

Sergei Savin +1 more instructor

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Business and Financial Modeling SpecializationUniversity of Pennsylvania

About this Course

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Useful quantitative models help you to make informed decisions both in situations in which the factors affecting your decision are clear, as well as in situations in which some important factors are not clear at all. In this course, you can learn how to create quantitative models to reflect complex realities, and how to include in your model elements of risk and uncertainty. You’ll also learn the methods for creating predictive models for identifying optimal choices; and how those choices change in response to changes in the model’s assumptions. You’ll also learn the basics of the measurement and management of risk. By the end of this course, you’ll be able to build your own models with your own data, so that you can begin making data-informed decisions. You’ll also be prepared for the next course in the Specialization.

Flexible deadlines

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Shareable Certificate

Earn a Certificate upon completion

100% online

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Coursera Labs

Includes hands on learning projects.

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Course 3 of 5 in the

Business and Financial Modeling Specialization

Approx. 7 hours to complete

English

Skills you will gain

Modeling
Risk
Microsoft Excel
Simulation

Flexible deadlines

Reset deadlines in accordance to your schedule.

Shareable Certificate

Earn a Certificate upon completion

100% online

Start instantly and learn at your own schedule.

Coursera Labs

Includes hands on learning projects.

Learn more about Coursera Labs

Course 3 of 5 in the

Business and Financial Modeling Specialization

Approx. 7 hours to complete

English

Instructors

Instructor rating

4.51/5 (102 Ratings)

Sergei Savin

Associate Professor of Operations, Information and Decisions

The Wharton School

148,332 Learners

2 Courses

Senthil Veeraraghavan

Associate Professor of Operations, Information and Decisions

The Wharton School

148,332 Learners

2 Courses

Offered by

University of Pennsylvania

Syllabus - What you will learn from this course

Content Rating90%(2,346 ratings)

Week1

Week 1

2 hours to complete

Week 1: Modeling Decisions in Low Uncertainty Settings

This module is designed to teach you how to analyze settings with low levels of uncertainty, and how to identify the best decisions in these settings. You'll explore the optimization toolkit, learn how to build an algebraic model using an advertising example, convert the algebraic model to a spreadsheet model, work with Solver to discover the best possible decision, and examine an example that introduces a simple representation of risk to the model. By the end of this module, you'll be able to build an optimization model, use Solver to uncover the optimal decision based on your data, and begin to adjust your model to account for simple elements of risk. These skills will give you the power to deal with large models as long as the actual uncertainty in the input values is not too high.

2 hours to complete

4 videos (Total 60 min), 2 readings, 1 quiz

Week2

Week 2

2 hours to complete

Week 2: Risk and Reward: Modeling High Uncertainty Settings

What if uncertainty is the key feature of the setting you are trying to model? In this module, you'll learn how to create models for situations with a large number of variables. You'll examine high uncertainty settings, probability distributions, and risk, common scenarios for multiple random variables, how to incorporate risk reduction, how to calculate and interpret correlation values, and how to use scenarios for optimization, including sensitivity analysis and the efficient frontier. By the end of this module, you'll be able to identify and use common models of future uncertainty to build scenarios that help you optimize your business decisions when you have multiple variables and a higher degree of risk.

2 hours to complete

3 videos (Total 51 min), 2 readings, 1 quiz

3 videos

2.1 High Uncertainty Settings, Probability Distributions, Uncertainty and Risk17m2.2 Common Scenarios for Multiple Random Variables, Risk Reduction, and Calculating and Interpreting Correlation Values18m2.3 Using Scenarios for Optimizing Under High Uncertainty, Sensitivity Analysis and Efficient Frontier15m

2 readings

PDFs of Lecture Slides for Week 210mExcel Files for Week 210m

1 practice exercise

Week 2: Modeling in High Uncertainty Quiz30m

Week3

Week 3

2 hours to complete

Week 3: Choosing Distributions that Fit Your Data

When making business decisions, we often look to the past to make predictions for the future. In this module, you'll examine commonly used distributions of random variables to model the future and make predictions. You'll learn how to create meaningful data visualizations in Excel, how to choose the the right distribution for your data, explore the differences between discrete distributions and continuous distributions, and test your choice of model and your hypothesis for goodness of fit. By the end of this module, you'll be able to represent your data using graphs, choose the best distribution model for your data, and test your model and your hypothesis to see if they are the best fit for your data.

2 hours to complete

4 videos (Total 81 min), 2 readings, 1 quiz

Week4

Week 4

2 hours to complete

Week 4: Balancing Risk and Reward Using Simulation

This module is designed to help you use simulations to enabling compare different alternatives when continuous distributions are used to describe uncertainty. Through an in-depth examination of the simulation toolkit, you'll learn how to make decisions in high uncertainty settings where random inputs are described by continuous probability distributions. You'll also learn how to run a simulation model, analyze simulation output, and compare alternative decisions to decide on the most optimal solution. By the end of this module, you'll be able to make decisions and manage risk using simulation, and more broadly, to make successful business decisions in an increasing complex and rapidly evolving business world.

2 hours to complete

4 videos (Total 53 min), 2 readings, 1 quiz

Reviews

4.6

315 reviews

5 stars
70.80%
4 stars
21.59%
3 stars
5.83%
2 stars
1.15%
1 star
0.60%

TOP REVIEWS FROM MODELING RISK AND REALITIES

by JCMar 11, 2020

Sergei should be more empathic, sometimes it feels boring; despite of that the entire course is great.

I would have love to practise a little bit more of simulation.

by JDFeb 13, 2021

Excellent orientation on risk and modelling. Both instructors were clear, articulate and well-organized. The modules , examples and quizzes reinforced the learning.

by AFMay 3, 2020

This course has rich theoretical and practical material if you want to study about risk and reward analysis.

Recommended for aspiring young finance or business analyst!

by GADec 25, 2017

Great examples, the best course of the specialization so far.

Week 3 was a little bit slow. I think it was going through some theory that was already covered by course 1.

View all reviews

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?
Access to lectures and assignments depends on your type of enrollment. If you take a course in audit mode, you will be able to see most course materials for free. To access graded assignments and to earn a Certificate, you will need to purchase the Certificate experience, during or after your audit. If you don't see the audit option:
The course may not offer an audit option. You can try a Free Trial instead, or apply for Financial Aid.
The course may offer 'Full Course, No Certificate' instead. This option lets you see all course materials, submit required assessments, and get a final grade. This also means that you will not be able to purchase a Certificate experience.
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.
Is financial aid available?
Yes. In select learning programs, you can apply for financial aid or a scholarship if you can’t afford the enrollment fee. If fin aid or scholarship is available for your learning program selection, you’ll find a link to apply on the description page.

More questions? Visit the Learner Help Center.

Modeling Risk and Realities

About this Course

Skills you will gain