Matlab function gives 'ans=0' answer problem

function ELS_Price=StepDown_ELS_F(ns, face, val_date, mid_date, strike, c_rate, dummy, ki, ki_YesNo, ref_S, S, r, vol, rho, q)
temp_ch=datenum(mid_date);-datenum(val_date);
mid_ch=temp_ch(find(temp_ch>=0));
c_rate=c_rate(find(temp_ch>=0));
strike=strike(find(temp_ch>=0));
N=mid_ch(end);
dt=1/365;
mid_size=length(mid_ch)
payment=zeros(ns,mid_size);
for i=1:ns
    for j=1:mid_size
        payment(i,j)=face*(1+c_rate(j));
    end
end
corr=[1 rho;rho 1];
M=chol(corr);
SP1=zeros(ns,N+1);
SP1(:,1)=S(1);
SP2=zeros(ns,N+1);
SP2(:,1)=S(2);
for i=1:ns
    w0=randn(N,2);
    w=w0*M;
    for j=2:N+1
        SP1(i,j-1)*exp((r-q(1)-vol(1)^2/2)*dt+vol(1)*sqrt(dt)*w(j-1,1));
        SP2(i,j-1)*exp((r-q(2)-vol(2)^2/2)*dt+vol(2)*sqrt(dt)*w(j-1,1));
    end
end
R1=SP1/ref_S(1);
R2=SP2/ref_S(2);
WP=min(R1,R2);
strike_ch=WP(:,mid_ch+1);
payoff=zeros(ns,mid_size);
for i=1:ns
    for j=1:mid_size
        if strike_ch(i,j)>=strike(j)
    		payoff(i,j)=payment(i,j);
    		break
        end
    end
    continue
end
for i=1:ns
    if payoff(i,:)==0
        switch ki_YesNo
            case 'No'
                ki_event=any(WP(i,:)<ki);
                if ki_event==1
                    payoff(i,end)=face*WP(i,end);
                else
                    payoff(i,end)=face*(1+dummy);
                end
            case 'Yes'
                payoff(i,end)=face*WP(i,end);
            otherwise
                error('ki_YesNo = Yes or No');
        end
    end
end
exp_payoff=mean(payoff);
disc_payoff=zeros(1,mid_size);
for j=1:mid_size
    disc_payoff(j)=exp_payoff(j)*exp(-r*mid_ch(j)/365);
end
ELS_Price=sum(disc_payoff);

----------------------------------------------------------------------------------

ns=1000;

face=10000;
val_date='06-14-2023';
mid_date= ['12-11-2023';'06-11-2024';'12-10-2024';'06-10-2025';'12-09-2025';'06-09-2026'];

strike=[0.9 0.85 0.8 0.8 0.8 0.75];

c_rate=[0.0375 0.075 0.1125 0.15 0.1875 0.225];

dummy=0.225;
ki=0.5;
ki_YesNo='No';

ref_S= [6576.8 4372];    
S=[6148 4288];        
r=0.075; 
vol=[0.388 0.256];       
rho=0.0395;
q=[0.01 0.01];

-----------------------------------------------------------------------

The upper part is the function definition and the second is data set. When I put the data set first and execute the function, Matlab program gives

ans =

0

answer. But I want is to receive the answer "ELS_Price=?"... Whats wrong?

Answer 1

[John D'Errico]

First, you need to understand a fundamental feature of MATLAB.

Suppose we call ANY function? It need not be one you wrote yourself. But we can write one below.

Now, I'll call that function, just as you did, like this:

a = 1;
b = 2;
addvars(a,b)

ans = 3

whos

  Name        Size            Bytes  Class     Attributes

  a           1x1                 8  double              
  ans         1x1                 8  double              
  b           1x1                 8  double              
  cmdout      1x33               66  char                

Was the variable c created in the base workspace? NO. Instead, it stuffed the answer into a dummy variable called ans.

The point is, if you want a function to return a named variabe, you need to supply the place where the result will be stored. But you can call the result anything you want. It need not be called c. c was the name we used INSIDE the function. Try it again now.

aplusb = addvars(a,b)

aplusb = 3

whos

  Name        Size            Bytes  Class     Attributes

  a           1x1                 8  double              
  ans         1x1                 8  double              
  aplusb      1x1                 8  double              
  b           1x1                 8  double              
  cmdout      1x33               66  char                

Do you see that now the result was stuffed into the variable named aplusb?

function c = addvars(a,b)
  % forms the sum of a and b.
  c = a+b;
end

Answer 2

[Image Analyst]

Evidently you never took the training onramp course. John gave an excellent explanation. To learn other fundamental yet essential concepts, invest 2 hours of your time here:

MATLAB Academy - Free 2 hour training