Fundamentals Data Collection Graphing Rates of Return Regression CAPM Financial Modeling Fundamentals Data Collection Graphing Rates of Return Regression CAPM Vitex.xls

Rates of Return

Prepare Spreadsheet New worksheet Label it Returns Data Returns + Candlestick

Prepare Spreadsheet Set up dates and assets Rule #1: Never enter the same information more than once. Set up dates and assets =Data!B1 =Data!L1 =Data!A3

Rates of Return Use the Range verification to check that you have 36 months Rule #1: Never enter the same information more than once. =Data!A3 36R x 1C =Data!A38

Rates of Return: Risk Free Rates are already expressed as annual rates /12 to generate monthly data /100 to get mathematical equivalent 1% = 0.01

Rates of Return: Index The index has neither dividends nor splits Use the closing price

Rates of Return: Equity Adjust for dividends and splits Algebra is fun

Rates of Return - Equity Make sure the returns make sense. June 2010: Does the price increase from May? May 2010: Does the price decrease from April? © Oltheten & Waspi 2012

Rates of Return - Equity make sure the returns make sense Price jumped from $34.01 to $36.73 © Oltheten & Waspi 2012

Portfolio Returns =(F$45*$D3) +(F$46*$E3) 50/50 portfolio =(50%*12.955%) +(50%*2.165%) =>7.560% 50/50 portfolio

Descriptive Statistics Add descriptive statistics =Count(B3:B38) =Average(B3:B38) =StDev.S.(B3:B38) Sample standard deviation

Rates of Return Format Reality check Express as % Line up decimals Rule #6: Format for Ease of Use Format Express as % Line up decimals Reality check If you see a -63.32% at least double check that the stock did decline 63% Rule #13: Always verify results

Rates of Return