Example function

Revision as of 03:11, 21 March 2018 by Max (talk | contribs)


Here is a simple example of a user-defined function.


This function, Capm, computes the expected return for a stock under the capital asset pricing model:

Example function 1.png

Parameters

It has three parameters, «rf», «rm», and «beta». The parameter qualifier Number says that it expects that three parameters should be numbers (or arrays of numbers). If not, it will give a error message during evaluation.

Description

The description is documentation explaining what the function returns and what its parameters mean.

Definition

The definition is an expression that uses its parameters, «rf», «rm», and «beta», and computes the value to be returned.

Sample usage

You use the Capm() function in a definition in the same way you would use any built-in function. For example, if the risk free rate is 5%, the expected market return is 8%, and Stock-Beta is defined as the beta value for a given stock, we can find the expected return according to the capital asset pricing model as:

Stock_return: Capm(5%, 8%, StockBeta)

The function works equally well when StockBeta -- or any parameter -- is an array of numbers. The result is an array of expected returns.

See Also


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