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Ric Thomas
เข้าร่วมเมื่อ 5 พ.ค. 2012
This channel is all about Making Finance Fun for Students!
Dividend Discount Models Made Easy!
Here is a brief tutorial covering the basic calculations in dividend discount models. This video is very helpful for students in intro finance classes and covers typical DDM exam questions.
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How to Calculate Forward Rates from Spot Rates
มุมมอง 3014 หลายเดือนก่อน
This short video shows you an easy and intuitive way of calculating and thinking about forward rates, using a spot rate yield curve.
Calculating Bond Duration - Easy in Excel !!!
มุมมอง 3285 หลายเดือนก่อน
This video gives a brief overview of bond duration - what is it, how it is used, and how to calculate it. I do both a bottom's-up method in Excel, and then show how you can use built-in excel functions to calculate it.
Triangle Arbitrage - Currency Trading
มุมมอง 1597 หลายเดือนก่อน
This short video shows how Triangle Arbitrage works with a simple example. This will be very useful for students in Multinational or International Finance classes.
How to use a Financial Calculator to Calculate Bond Prices and Bond Yields
มุมมอง 44910 หลายเดือนก่อน
This short video demonstrates how to calculate bond prices and bond yields using a Texas Instrument BA II Plus financial calculator. Very easy!
Calculate performance ratios in Excel! Sharpe, Sortino, Treynor, and Information Ratio!
มุมมอง 5Kปีที่แล้ว
This video shows how to calculate the key portfolio performance ratios in Excel.
How to Calculate Bond Prices and Bond Yields using Excel!
มุมมอง 4.5Kปีที่แล้ว
This short video walks you through how to calculate bond prices, if given the yield, and how to calculate the yield-to-maturity, if given the bond price. Very simple!
Screening and Finding Stocks Made Easy!
มุมมอง 168ปีที่แล้ว
This short video shows you how to use Yahoo Finance! to easily narrow down a stock universe. You can screen on various favorable attributes that you favor to get the number of potential buys down to a workable number. This is a great tool for students looking to buy stocks in an investment class. Even stock pros can use this simple tool. It's easy!
How to Calculate Portfolio Tracking Error in Excel!
มุมมอง 8Kปีที่แล้ว
This short video shows you how to both calculate and interpret portfolio tracking error. We do all of our work here in Excel. It's pretty easy!
Elon Musk's Hostile Takeover of Twitter Explained!
มุมมอง 1822 ปีที่แล้ว
This video updates the status of the Musk bid for Twitter as of April 16, 2022. I cover the offer, compare it to a friendly takeover, discuss the Poison Pill, the potential White Knight scenario, and the most likely next steps.
How to Make a Chart in Excel in 1 Easy Step!
มุมมอง 2092 ปีที่แล้ว
This short video shows a quick trick for how you can easily make a chart in Excel. This simple trick greatly simplifies the process!
Covered Interest Arbitrage Made Easy!!!
มุมมอง 2.2K2 ปีที่แล้ว
This short video demonstrates how Covered Interest Arbitrage works. Students in an international finance course, focusing on currencies and interest rates should find this very helpful.
Interest Rate Parity Made Easy!
มุมมอง 16K2 ปีที่แล้ว
This short video shows how forward currency rates are aligned with the differences in interest rates - creating "Interest Rate Parity". This shows how to calculate currency forward rates based on interest rates and gives a bonus real-world example using Euros vs. Dollars.
DCF Analysis Part 4: Final Valuation - and Sensitivity Analysis!
มุมมอง 4.1K2 ปีที่แล้ว
This video shows you a simple way to estimate a company's stock price, by discounting back projected cash flows over the horizon period and estimating a terminal value. I also show how to put together a cool table that can do sensitivity analysis (tweaking the WACC and the terminal growth rate).
Portfolio Performance Attribution: The Brinson-Fachler Model
มุมมอง 11K2 ปีที่แล้ว
This video demonstrates how to do performance attribution using the Brinson-Fachler model. This is one of the more popular methods for performance attribution in the investment management industry.
Discounted Cash Flow Analysis Part 3 - Forecasting Free Cash Flow
มุมมอง 2.9K2 ปีที่แล้ว
Discounted Cash Flow Analysis Part 3 - Forecasting Free Cash Flow
Discounted Cash Flow Analysis Part 2 - Weighted Average Cost of Capital (WACC): Live Example!
มุมมอง 1.6K2 ปีที่แล้ว
Discounted Cash Flow Analysis Part 2 - Weighted Average Cost of Capital (WACC): Live Example!
Discounted Cash Flow Analysis Part 1 - Patrick Mahomes' Salary
มุมมอง 1.2K2 ปีที่แล้ว
Discounted Cash Flow Analysis Part 1 - Patrick Mahomes' Salary
How to Download Company Financial Statements For Free!
มุมมอง 19K2 ปีที่แล้ว
How to Download Company Financial Statements For Free!
Portfolio Optimization in Excel Using Solver
มุมมอง 24K2 ปีที่แล้ว
Portfolio Optimization in Excel Using Solver
How to create a Variance Covariance Matrix in Excel
มุมมอง 49K2 ปีที่แล้ว
How to create a Variance Covariance Matrix in Excel
Hello - I reviewed your lesson as a refresher. My pv answer was $21370 .10 and I reviewed your lesson several times. I did not get your answer. Even if I set the calculation to BGN or END, it was still 21370.10. Any idea why my PV answer not matching?
Excuse me but where did you get the 7% in cell J5? Also, you use the valu"information ratio" but not the sharpe ratio what I understand from the video, can you please explain why?
Very cool! What are all the different ways a layman can borrow millions of dollars at 3%? Thinking I'd put that into sorta low-risk 5-6% checking/saving accounts, bonds, etc. and keep the leftover yields after repayments; what're you thoughts on this? Thank you!
It is very helpful. Thank you! How do you calculate the price of bonds, if you do not have Yield to Maturity? The question only has "Face Value", "Maturity" and "Coupon". Find the prices for the following coupon bonds : • Face value: $100 Maturity Coupon Bond A 3 1.75% Bond B 7 2.875% Bond C 10 3.250%
Hi Ric - when calculating the beta, why aren’t you using the excess returns above the risk-free rate for the portfolio and the benchmark as your inputs? Is it okay to just use the returns of those inputs without first calculating the excess returns?
Hi, the stock's beta is first estimated using the market index model, which simply regresses the stock return (or asset return) against the market index. It is true that the CAPM subtracts the risk free rate from the market expected return, then multiplies this by beta and adds in the risk free rate. However, the beta itself is estimated by directly regressing the asset return against the market return. Even if you did subtract the risk free rate, you'd get a similar beta estimate, however. I hope this helps. Thank you.
@@ricthomas6436Thanks Ric! So when calculating beta, I would regress the asset itself against the market return. Although not covered in this video, when calculating alpha, would I use the CAPM method of subtracting the risk-free rate from the market return and benchmark return before regressing the market return against the benchmark return? I’m struggling to distinguish when to subtract the risk-free rate from the market return and benchmark return and when not to. I’ve seen videos where they subtract the risk-free rate to calculate both beta and alpha other videos where they don’t. Thanks again for the help!
@@avs__1702 Yes, in this case you regress the return of the asset - risk free rate against the return of the market - risk free rate. You are testing to see if, assuming we live in a CAPM world, the alpha (constant term) is different than zero. Assuming we live in CAPM world, and the market is efficient, the constant term should be 0. I do have a video on my channel that covers this as well. But in this case, the reason that you are regressing against the market - risk free, is that you are now testing to see if the CAPM holds, if the asset has "alpha", and if the market is efficient. Hope this helps. RT
Thanks, very informative
You're the best man. Just needed the exact thing for my assignment :)))))))
What i dont get is why the jpy is at a premium in the long term if they offer lower interest
I guess it's because that the extra interest rate you earn would be in USD. So, as a Japanese citizen, you would again convert it to JPY.. (Invested value+extra interest income).. Which would increase the demand for JPY and appreciate it more, compared to the previous time, which depreciated JPY only as a result of previously Invested value.
(Invested value + Extra Interest Income) > Invested value
So helpful and well-explained!
Thank you habibi from me, Sikandar, Berna, Azamon, Nisanur 💌
I think you got the financial interaction wrong. It’s -7 - (-4) …
You are correct. Actually, I just typed it in wrong, but the math was correct. As you point out, its -7% - -4% = -3%. Then when we multiply by the 11% underweight, we get the 33 bps. that is shown, which is correct. But my bad on on typing this in incorrectly, and good catch. Thank you.
super Thomas
Thanks for the great share . Would save users time by explaining the basics early on. The µ divided by σ in first table D col is difficult to tell at first so one can follow along. was wondering what that 0.23 for as you went over the first two cols but not that one. It took me up to 5:02 to figure out it's the ratio of weighted average. Hope it helps someone...
Ric please please please start a course in Udemy that summarizes all of your videos and starts from scratch. there are no videos on Udemy on Portfolio analysis like this. If anyone knows any course that does this in Excel please let me know.
Thank you, I can look into that. Regards, RT
Please do fixed income attribution and factor risk attribution
Many thanks. Wow Excel is so stupid that you have to manually copy paste the upper triangle in the end.
Thank you so much Mr Thomas, can't express how useful your practical examples were for me !! Keep going, God Bless You
can u help me graph efficient frontier constructed from the index model and the full covariance matrix ?
can u help me graph efficient frontier constructed from the index model and the full covariance matrix ?
Thank you! That was really helpful!
How would I go about using solver to find optimal weights for a portfolio with a specific return, say 2%?
In that case, you would open solver, at the top you want to MINIMIZE volatility, and then one of the constraints would be that the solved return would equal 2 percent. This is similar to the video where I am MAXIMIZING return, and constraining volatility to be a fixed level (like 6 percent).
Great work Ric. Thanks again for the Wisconsin leads. Moving soon!
Ric, many thanks for the detailed explanations. I am trying to measure performance of my accounts as if they were hedge funds. I would love to have a copy of your spreadsheet to use your data sets in my spreadsheet to assure the numbers tie out. I'll send you a copy of my spreadsheet report format when done. (Sort of like turning in my homework.) Any chance I could download a copy?
how does the Yen get stronger when the US has higher interest rates and in theory creates a stronger currency as we've seen over the last year???? it seems like the equation should be 1.02/1.01 *150 = 151.49
The forward yen rate will trade at a premium to the spot yen rate when the US has higher interest rates. However, what you say is true in the sense that, over time, the yen spot may continue to depreciate in the face of higher rates. But even so the yen forward will continue to trade at a premium to the yen spot. Both can be true. In fact, one of the reasons the yen has depreciated is that many traders borrow yen (due to its low rates) and invest in dollars (due to the higher rates). This is the yen-carry trade and is what we’d call “uncovered” interest rate arbitrage.
In the second sentence above, my comment should read “… in the face of higher US interest rates.”
Thank you Ric. I’ve been searching for the past hour and glad I came across your video. Everything I needed. Cheers!
I had never heard about this method of Arbitrage, it's so interesting!
thanks
Mr Thomas, I cannot thank you enough for this free content! You're helping a lot of students and early professionals globally! Thank you
Hello, this is very explanative. Thanks. Can you also make a video on computing up capture and down capture vs benchmark for this fund over the same time horizon?
thanks man, it was very helpful to my project!
Hi sir how u calculate the yen can grow to 108070000 divide or what
Hello, why do you calculate the performance ratio with the portfolio return of the last month instead to use the mean of each month of the portfolio return? i saw 2 manners to calculate the performance ratio but the result is not the same... i don't really get it
This is fantastic. Great education. Easy to follow. I added all of these performance ratios to my own spreadsheet in Google Sheets to evaluate our investments. It would've taken me a LOT longer without this. Thank you very, very much.
Thank you Sir, this was really so helpful, greetings from Yerevan, Armenia 🇦🇲
can u giv the file?
This was good. Thank you
Wonderful Explanation ♥️
Great video! Thank you for helping me understand this better.
Y is he using the words discount rate and interest rate interchangeably
This is a great video thank you!
thank you, your explanation really helped me
why do we use benchmark and not portfolio weights for selection effect?
If I want to get the annualized tracking error from weekly excess return, should I multiply by sqrt(52)?
Yes. And if you use daily returns, multiply by sqrt of (252) since that is approximately the number of trading days in a year.
Thank you very much! Excellent tutorial!
it's so well explained, thank you, that help me a lot!!!
Very useful, thanks
Superb ! content !
my grad school finance management professor hasnt taught anything/been away for 4 weeks so far. just using a textbook. this helped greatly because... doing these by hand i could not figure out for the life of me
Great video! Thank you so much!
I have a doubt pertaining to the formula for tracking error Do we take the standard deviation of (the differences obtained between benchmark return & portfolio return) Or Do it as shown in the video I.e (calculate deviation from benchmark return,and use the sum of squares for the same,for TE)?
Hi @kailbaing4288, excellent question. You can do it either way, as they will give you almost identical answers. In the manual method that I used - I did not subtract the mean excess return. In reality, the mean excess return is going to be a number very close to 0, so the differences between the two methods will be close. Technically, the manual method (where you do not subtract out the mean) is what many authors on the subject recommend when they show the formula. However, in practice you will find that most investment professionals will use an excel stdev function (also shown in the video) which does subtract the mean. In fact, the only reason my two calculations show the same number here is because of rounding. In reality they are (very slightly) different.