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Wharton Business and Financial Modeling Capstone

Richard Lambert, Robert W. Holthausen, Don Huesman, and Richard Waterman

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.

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Syllabus

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.

Traffic lights

Read about what's good

what should give you pause

and possible dealbreakers

Introduces beginners to financial modeling

Strengthens existing foundation in financial modeling

Develops foundational skills in data analysis

Develops advanced skills in data analysis

Taught by recognized experts in the industry

Offers a comprehensive study of business and financial modeling

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Reviews summary

Wharton financial modeling capstone project

Assumes prior knowledge from prerequisite courses.

"Definitely recommend taking the prerequisite courses first; this is a capstone."

"Needed to revisit some concepts from earlier courses to keep up."

"If you haven't done the specialization, some parts might be challenging."

Requires significant time investment to complete projects.

"Allocate enough time for the data analysis and modeling steps."

"The final project took longer than I initially expected."

"While challenging, the effort was rewarding."

Heavy reliance on spreadsheet software like Excel.

"While challenging, the spreadsheet work significantly improved my skills."

"Be prepared to spend a lot of time in Excel solving the problems."

"A strong command of spreadsheet functions is definitely needed."

Covers key concepts like optimal portfolios and CAPM.

"Solidified my understanding of constructing an optimal portfolio."

"Working with the efficient frontier was a valuable exercise."

"The CAPM section, even optional, added good perspective."

Real-world modeling and presentation project.

"The final project allowed me to apply everything learned in a realistic scenario."

"Building the data model and presentation felt like a real work task."

"Having the presentation as a potential work sample is a big plus."

"Using real financial data made the exercises much more engaging."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Wharton Business and Financial Modeling Capstone with these activities:

Test Your Return Calculations

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Test your return calculations and understanding of summary statistics by completing a sample return calculation.

Browse courses on Summary Statistics

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Review the instructions for calculating the sample return
Calculate the sample return using the provided data
Compare your result to the provided answer

Follow a guided tutorial on using a financial modeling software package

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Gain practical experience by following a guided tutorial on using a financial modeling software package.

Browse courses on Financial Modeling

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Choose a financial modeling software package to learn.
Find a guided tutorial for that software package.
Follow the steps in the tutorial.
Practice using the software package on your own.

Build Financial Model to Calculate Returns

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Build a financial model using historical data to calculate returns for a set of securities.

Browse courses on Yahoo Finance

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Gather historical data from Yahoo Finance
Create a spreadsheet model to calculate daily returns
Calculate summary statistics for the daily returns

Seven other activities

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Calculate mean and standard deviation of a dataset using spreadsheet software

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Reinforce your understanding of basic statistical measures by calculating mean and standard deviation using spreadsheet software.

Browse courses on Descriptive Statistics

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Open a spreadsheet application and input a dataset.
Use the appropriate formula to calculate the mean of the dataset.
Use the appropriate formula to calculate the standard deviation of the dataset.
Review and interpret the results.

Construct a scatterplot to visualize the relationship between two variables

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Enhance your data visualization skills by creating a scatterplot to explore the relationship between two variables.

Browse courses on Data Visualization

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Open a spreadsheet application and input the data.
Select the appropriate chart type to create a scatterplot.
Analyze the scatterplot and identify any patterns or trends.

Design Optimal Risky Portfolio

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Design an optimal risky portfolio using the efficient frontier and Solver add-in to find the minimum variance and 'optimal risk portfolio' weights for a portfolio of selected securities.

Browse courses on Efficient Frontier

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Use Solver to calculate the portfolio weights for two securities that results in the portfolio with the minimum variance.
Calculate the 'optimal risky portfolio' on the efficient frontier for these same two securities, then for all 10 stocks in the pool.

Create a video tutorial on a specific financial modeling technique

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Share your knowledge and solidify your understanding by creating a video tutorial on a specific financial modeling technique.

Browse courses on Financial Modeling

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Choose a specific financial modeling technique to focus on.
Develop a script and storyboard for your video.
Record and edit your video.
Upload your video to a platform like YouTube or Vimeo.

Read the book 'Data Analysis for Business' by Brookes

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Expand your knowledge of business data analysis by reading a comprehensive guide to the principles and practices.

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Read Chapter 1: Introduction to Data Analysis.
Read Chapter 2: Data Collection and Preparation.
Read Chapter 3: Data Exploration and Visualization.
Review key concepts and summarize your learnings.

Develop a financial model for a hypothetical business

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Apply your knowledge of financial modeling to create a comprehensive plan for a hypothetical business.

Browse courses on Financial Modeling

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Define the business concept and objectives.
Gather financial data and assumptions.
Build a financial model using spreadsheet software.
Analyze the financial model and identify potential risks and opportunities.
Present your findings and recommendations.

Contribute to an open-source financial modeling project

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Enhance your skills and connect with the community by contributing to an open-source financial modeling project.

Browse courses on Financial Modeling

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Identify an open-source financial modeling project to contribute to.
Review the project's documentation and codebase.
Identify an area where you can make a contribution.
Develop and test your contribution.
Submit a pull request to the project.

Career center

Learners who complete Wharton Business and Financial Modeling Capstone will develop knowledge and skills that may be useful to these careers:

Quantitative Analyst

Quantitative analysts use mathematical and statistical models to analyze financial data. This course provides a deep understanding of financial modeling and analysis. It will teach you how to build and calibrate models, analyze data, and make predictions.

See salaries and explore the career path for Quantitative Analyst

Hedge Fund Manager

Hedge fund managers manage investment funds that use advanced strategies to generate high returns. This course provides a deep understanding of financial modeling and analysis. It will teach you how to build and calibrate models, analyze data, and make investment decisions.

See salaries and explore the career path for Hedge Fund Manager

Portfolio Manager

Portfolio managers manage investment portfolios for individuals and institutions. This course provides a comprehensive understanding of financial modeling and analysis. It will teach you how to construct portfolios, manage risk, and evaluate performance.

See salaries and explore the career path for Portfolio Manager

Private Equity Investor

Private equity investors invest in private companies with the goal of generating high returns. This course provides a deep understanding of financial modeling and analysis. It will teach you how to value companies, structure deals, and manage risk.

See salaries and explore the career path for Private Equity Investor

Investment Banker

Investment bankers help companies raise capital and advise them on mergers and acquisitions. This course provides a deep understanding of financial modeling and analysis, which is essential for success in this role. It will teach you how to value companies, structure deals, and manage risk.

See salaries and explore the career path for Investment Banker

Venture Capitalist

Venture capitalists invest in early-stage companies with the goal of generating high returns. This course provides a deep understanding of financial modeling and analysis. It will teach you how to value companies, structure deals, and manage risk.

See salaries and explore the career path for Venture Capitalist

Financial Analyst

Financial analysts use their knowledge of companies and industries to make investment recommendations. This course provides a strong foundation in financial modeling and analysis. It will teach you how to use data to identify opportunities and risks, which is essential for success in this role.

See salaries and explore the career path for Financial Analyst

Risk Manager

Risk managers identify and manage risks for companies. This course provides a strong foundation in financial modeling and analysis. It will teach you how to measure risk, develop mitigation strategies, and communicate risk to stakeholders.

See salaries and explore the career path for Risk Manager

Actuary

Actuaries use mathematics and statistics to assess risk and uncertainty. This course provides a strong foundation in financial modeling and analysis. It will teach you how to build and calibrate models, analyze data, and make predictions.

See salaries and explore the career path for Actuary

Financial Planner

Financial planners help individuals and families plan for their financial future. This course provides a strong foundation in financial modeling and analysis. It will teach you how to analyze financial data, develop financial plans, and make investment recommendations.

See salaries and explore the career path for Financial Planner

Data Scientist

Data scientists use data to solve problems and make decisions. This course provides a strong foundation in financial modeling and analysis. It will teach you how to collect, clean, and analyze data, and how to build and interpret models.

See salaries and explore the career path for Data Scientist

Insurance Underwriter

Insurance underwriters assess risk and determine insurance premiums. This course provides a strong foundation in financial modeling and analysis. It will teach you how to analyze financial data, identify risks, and make decisions.

See salaries and explore the career path for Insurance Underwriter

Consultant

Consultants advise businesses on a variety of topics, including finance. This course provides a strong foundation in financial modeling and analysis. It will teach you how to analyze financial data, identify opportunities, and make recommendations.

See salaries and explore the career path for Consultant

Business Analyst

Business analysts use data to help businesses make better decisions. This course provides a strong foundation in financial modeling and analysis. It will teach you how to analyze financial data, identify opportunities, and make recommendations.

See salaries and explore the career path for Business Analyst

Economist

Economists study the economy and make predictions about its future. This course provides a strong foundation in financial modeling and analysis. It will teach you how to analyze economic data, identify trends, and make forecasts.

See salaries and explore the career path for Economist

Reading list

We've selected 14 books that we think will supplement your learning. Use these to develop background knowledge, enrich your coursework, and gain a deeper understanding of the topics covered in Wharton Business and Financial Modeling Capstone.

Financial Modeling and Valuation

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Will help you learn how to build financial models and perform valuations. It covers the theory behind financial modeling and shows you how to use Excel to create and value companies.

Financial Modeling and Valuation: A Practical Guide...

Hardcover

$$$

Financial Modeling and Valuation: A Practical Guide...

Audible Audiobook

Financial Modeling and Valuation: A Practical Guide...

Kindle Edition

$$$

Essentials of Investments

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Classic textbook on investments. It covers a wide range of topics, including asset pricing, portfolio theory, and investment management.