Wharton Business and Financial Modeling Capstone

About this course: 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.

Created by:  University of Pennsylvania

• Taught by:  Richard Lambert, Professor of Accounting

  Accounting- Wharton School

• Taught by:  Robert W. Holthausen, Professor

  Accounting

• Taught by:  Don Huesman, Managing Director, Wharton Online

  Innovation Group- Wharton School

• Taught by:  Richard Waterman, Professor of Statistics

  Statistics-Wharton School

Basic Info Course 5 of 5 in the Business and Financial Modeling Specialization Language English How To Pass Pass all graded assignments to complete the course. User Ratings 4.6 stars Average User Rating 4.6See what learners said 课程作业

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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.

Syllabus


WEEK 1


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 expand

1. 阅读: Project Description - Read me first!
2. 阅读: Project Prompt
3. 阅读: Historical Stock Data
4. 讨论提示: Module 1 Discussion: Introductions
5. 讨论提示: Questions about the Project

Graded: Project Scope Quiz

WEEK 2


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, 4 readings expand

1. 阅读: on Close Price versus Adjusted Close Price
2. 阅读: on the Sharpe Ratio
3. 阅读: Sample Returns Spreadsheet (AAPL)
4. 讨论提示: Questions about Calculating Performance and Summary Statistics
5. Video: Definition and Uses of Models, Common Functions (Fundamentals of Quantitative Modeling)
6. Video: How Models are Used in Practice (Fundamentals of Quantitative Modeling)
7. Video: Mathematical Functions (Fundamentals of Quantitative Modeling)
8. Video: Navigating a Spreadsheet and Crafting Formulas (Introduction to Spreadsheets)
9. Video: How To Build an Optimization Model: Hudson Readers Ad Campaign (Modeling Risk and Realities)
10. Video: Data and Visualization: Graphical Representation (Modeling Risk and Realities)
11. 阅读: PDFs of Refresher Video Slides

Graded: Daily Returns Quiz
Graded: Summary Statistics Quiz

WEEK 3


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, 5 readings expand

1. 阅读: Videos Explaining the Efficient Frontier and Optimal Risky Portfolio
2. 讨论提示: Third party resources for calculations
3. 阅读: on Portfolio Variance
4. 阅读: on the Efficient Frontier
5. 阅读: on Short Selling
6. 讨论提示: Questions about minimum variance and "optimal risky portfolio" weights
7. Video: Introducton to Linear Models and Optimization (Fundamentals of Quantitative Modeling)
8. Video: Present and Future Value (Fundamentals of Quantitative Modeling)
9. Video: Optimization (Fundamentals of Quantitative Modeling)
10. Video: Linear Programming (incl. Solver) (Introduction to Spreadsheets)
11. Video: Optimizing with Solver, and Alternative Data Inputs (Modeling Risk and Realities)
12. Video: Adding Risk: Managing Investments at Epsilon Delta Capital (Modeling Risk and Realities)
13. Video: Using Scenarios for Optimizing Under High Uncertainty, Sensitivity Analysis and Efficient Frontier (Modeling Risk and Realities)
14. 阅读: PDFs of Refresher Video Slides

Graded: The Minimum Variance and Optimal Risky Portfolio

WEEK 4


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, 3 readings, 1 practice quiz expand

1. 阅读: Video on the Capital Asset Pricing Model (CAPM)
2. 阅读: on the Capital Asset Pricing Model
3. 练习测验: Capital Asset Pricing Model
4. 讨论提示: Questions, comments, and helpful resources for CAPM
5. Video: Introduction to Regression (Fundamentals of Quantitative Modeling)
6. Video: Use of Regression Models (Fundamentals of Quantitative Modeling)
7. Video: Correlation and Regression (Introduction to Spreadsheets)
8. 阅读: PDFs of Refresher Video Slides

WEEK 5


Step 5: Creating Your Asset Allocation & Final Presentation



In this final module you are asked to move beyond a stock-only portfolio to one utilizing more diversified assets and to prepare a short presentation summarizing your findings. As explained in Step 5 of the Project Prompt, you have $5 million to invest in the Vanguard Total Bond Market Index Fund (ticker: VBTLX) and Vanguard 500 Index (ticker: VFIAX) investment vehicles. There are two assessments in this module. First, you'll complete a short quiz on the characteristics of your optimal risky portfolio. Then, in the peer review component of this Capstone, you are tasked with preparing a short presentation that (i) explores how your portfolio of mixed asset class of funds compares to a single security (AAPL) and (ii) uses that comparison to discuss the importance of portfolio diversification.


1 reading expand

1. 阅读: VBTLX and VFIAX Monthly Returns
2. 讨论提示: Module 5 Discussion - Reflect on your experience and share your insights
3. 讨论提示: How did you create a Mixed Asset Portfolio?
4. 讨论提示: Arguments for and against mixed asset portfolios

Graded: Working with a Diversified Portfolio
Graded: Portfolio Performance Presentation