Cumulative Return
 

I have a series of monthly return and need to create a formula that can
compute it's cumulative return in the following manner:
(1+return1)*(1+return2)*(1+return3))*(1+return4)*( 1+return5)

Subsequently, I would need to compute the "average" return by creating
another formula in the following manner:
((1+return1)*(1+return2)*(1+return3)*(1+return4)*( 1+return5))^(1/n) €“ 1,
where "n" should be the "count" of months.

Appreciate any assistance. Thank you!!!

Cumulative Return
 

Natalie,

You should create a line to add 1 for each return than, the formula could be:
(assuming that the returns are between column C and G and line( +1) is 30)

Cumulative = "=product(c30:g30)-1"
Average = "=product(c30:g30)^(1/count(c30:g30))-1"

Hope its hekps

Marcelo - Brazil


"Natalie" escreveu:

I have a series of monthly return and need to create a formula that can
compute it's cumulative return in the following manner:
(1+return1)*(1+return2)*(1+return3))*(1+return4)*( 1+return5)

Subsequently, I would need to compute the "average" return by creating
another formula in the following manner:
((1+return1)*(1+return2)*(1+return3)*(1+return4)*( 1+return5))^(1/n) €“ 1,
where "n" should be the "count" of months.

Appreciate any assistance. Thank you!!!

Cumulative Return
 

As Marcelo said, the best way to calculate the total return is to create another
column with =1+return in it. Then you can use the Product function. If this is a
series which gets added to every month, you can make the formula more easily
extendible by using:

=Product($c$30:g30)-1

That way, when you extend the formula to column h, it will copy without
requiring editing.

To calculate the average, I'm sure you want the average *compound* return. The
easiest way is to use the Rate function, as in:

=Rate((column(g30)-column($c30)+1),0,-1,1+totalreturn)

--
Regards,
Fred


"Marcelo" wrote in message
...
Natalie,

You should create a line to add 1 for each return than, the formula could be:
(assuming that the returns are between column C and G and line( +1) is 30)

Cumulative = "=product(c30:g30)-1"
Average = "=product(c30:g30)^(1/count(c30:g30))-1"

Hope its hekps

Marcelo - Brazil


"Natalie" escreveu:

I have a series of monthly return and need to create a formula that can
compute it's cumulative return in the following manner:
(1+return1)*(1+return2)*(1+return3))*(1+return4)*( 1+return5)

Subsequently, I would need to compute the "average" return by creating
another formula in the following manner:
((1+return1)*(1+return2)*(1+return3)*(1+return4)*( 1+return5))^(1/n) - 1,
where "n" should be the "count" of months.

Appreciate any assistance. Thank you!!!