Fundamentals of Investment Risk and Uncertainty Analysis

This course aims to develop skills in the translation of uncertainties in input data (costs, volumes, prices etc) into the domain of financial decision metrics such as NPV.

Target audience: project economists, decision analysts, financial analysts, project development staff

Duration: minimum 8 hours (but more if all example spreadsheets are explored in some detail).

Benefit: 60 days access to course and coaching.

There are 10 modules consisting of introductory video, an interactive lesson with spreadsheet examples and an end of lesson quiz.

1. Why bother – introduction, concept of expectation value, rationale of probabilistic analysis
2. Statistical concepts – basics of probability distributions
3. Range and probability assessment – by historic data analysis and judgemental methods
4. Tornado diagram – a visual to show the key risks and uncertainties
5. Decision trees – for structuring decision problems and communication
6. Monte Carlo simulation demystified – using spreadsheets only
7. Analytical methods – introduction to probabilistics on a mathematical basis including the novel DeltaLogN method
8. Tornado based probabilistics – three ways to generate an NPV distribution from a tornado
9. Decision tree based probabilistics – combining a decision tree with tornados
10. Implementation and communication – key take aways for communicating uncertainty with decision makers