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

2. Rates of Return

3. Prepare Spreadsheet New worksheet Label it Returns Data Returns +
Candlestick

4. 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

5. 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

6. 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

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

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

9. Rates of Return: Equity
Adjust for dividends and splits
Use either formula
Verify results

10. Rates of Return - Equity
make sure the returns in the split month make sense
© Oltheten & Waspi 2012

11. Rates of Return - Equity
make sure the returns make sense
© Oltheten & Waspi 2012

12. 50/50 Portfolio
50/50 Portfolio is calculated directly from the rates of return

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

14. 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 % at least double check that the stock did decline 63%
Rule #13:
Always verify results

15. Rates of Return