Essentials Of Business Risk Analysis Modeling

How to build business models that incorporate uncertainty, and how these models can improve business decisions.

What you'll learn

Understand how risk analysis modeling is used in business

Know the probability distributions and math needed to perform a business risk analysis

Evaluate the aggregate exposure from a set of risks in a register

Complete a financial risk analysis for a business investment

Be able to audit a risk analysis model identifying errors and interpreting formulae

Create, interpret and present risk analysis reports to decision-makers

Requirements

Basic knowledge of Excel. Reasonable competency with numbers and logic

Description

A very large component of a business' success is how it manages risk. Risk is managed far more effectively if one can quantify and therefore compare the uncertainty of outcomes from different possible decision options.Risk quantification isn't actually that hard. It's been used very successfully for over twenty years in most large organizations, and the ability to build a simple, defensible and decision-focused risk analysis is a skill much sought-after in large corporations. This course will teach you that skill.You don't need to have any background in probability or statistics to complete this course. This course assumes no prior knowledge of probability concepts. You also don't need to have a strong background in math - if you passed math at high school you'll be fine. You should be comfortable with numbers, however, and have a logical mindset. It will also be quite helpful if you are familiar with the very basic features of Excel.Bear in mind that risk analysis is a creative process. This course teaches you how to describe uncertainty in numerical terms by building risk analysis models that faithfully reflect your view of the uncertainty ahead. That's half the battle. The other half is to think about what risks you face and how you can manage them best. That's the really interesting and challenging part.   

Overview

Section 1: Introduction

Lecture 1 Introduction

Section 2: Setting up your risk analysis software

Lecture 2 Introduction

Lecture 3 How to download and install ModelRisk

Section 3: The basics of Monte Carlo simulation

Lecture 4 Introduction

Lecture 5 Explanation of Monte Carlo simulation through a series of examples and exercises

Section 4: A review of the probability distributions needed in business risk modeling

Lecture 6 Introduction

Lecture 7 A review of key distributions used in risk analysis and how they are applied

Section 5: Creating and presenting risk analysis results

Lecture 8 Introduction

Lecture 9 Reporting and reviewing results

Section 6: Comparing decision options using multiple simulations

Lecture 10 Introduction

Lecture 11 Setting up multiple simulations in a model

Section 7: Common math mistakes in risk models and how to avoid them

Lecture 12 Introduction

Lecture 13 The most common mistakes and their remedies

Section 8: What makes a good model

Lecture 14 Introduction

Lecture 15 What makes a good model

Section 9: Wrap up

Lecture 16 How to get your Credly badge

Analysts supporting decision-makers who wish to incorporate risk and uncertainty in their evaluations of different decision options.