Spreadsheets Tutorial: Financial Analytics in Spreadsheets | Intro and first metrics

Want to learn more? Take the full course at https://learn.datacamp.com/courses/financial-analytics-in-spreadsheets at your own pace. More than a video, you'll learn hands-on coding & quickly apply skills to your daily work. --- Hi, my name is David Ardia, and I am a professor in Quantitative Methods for Finance. In this course, you'll learn how to build an interface with spreadsheets to monitor financial investments. Tracking their performance makes sure your investments meet your expectations on reward and risk. Banks, asset managers, and individuals can invest money in publicly traded firms, by buying stocks. You can think of the market value of a company as a cake. This cake is divided equally into slices, and each slice is a stock traded on the exchange. The market price of a stock is not constant. It fluctuates over time depending on the law of supply and demand. As a reward for holding the stock, the company may pay a pre-specified amount of money, called a dividend, to its shareholders. Dividends can be paid at various time periods. In this course, you'll monitor the hypothetical stock ABC. You'll build a dashboard with spreadsheets composed of four panels. In each chapter, you'll build a different part of the dashboard. The first panel summarizes past prices; the second measures reward and risk indicators; the third displays the probability distribution of historical returns, and the last panel compares the stock ABC with a benchmark. Performance monitoring starts with a dataset from which you can extract relevant metrics. In your case, you have a time series of monthly historical prices going from December 2012 to December 2017, together with the dividends paid out during that period. A time series is a series of values indexed by the time. First, you can look at the number of prices included in the series. The number of past observations on which you are doing your computations is important, as more data leads to more accurate results. Next, you