Question

Any idea why Matlab could behave like this?

>> sum([0 0 0])
Subscript indices must either be real positive integers or logicals.

>> sum([1 1 1])

ans =

     4     4     4

Fighting with this more than 2 hours, still can’t get it.
This is the code I run before this happens.
Before running this code – the function sum() works fine.

price = 100;
vola = 0.2;
r = 0.05;
n_step = 3;
dt = 1/250;
S0 = 100;
T = 1;

s = [1 0 0 0;1 2 0 0;1 2 3 0; 1 2 3 4];
prob = 0.5;
n_path = 2^n_step; % bottle neck for binomial approach
avg_price = zeros(n_path, 2); % first column - probability, second - average price
path_matrix = zeros(n_path, n_step); % all possible paths 1-up, 0-down
for k = 0:n_path-1
    path_matrix(k+1, :) = de2bi(k,'left-msb',n_step);
end

node_matrix = path_matrix;
for k=2:n_step
    node_matrix(:, k) = node_matrix(:, k-1) + node_matrix(:, k);
end
node_matrix = node_matrix + 1;

% go through all possible paths and calculate sum of prices
for k = 1:n_path
    % probability of path
    n_up = sum(path_matrix(k, :));
    avg_price(k, 1) = prob^n_up*(1 - prob)^(n_step - n_up);

    % get sum of prices over all states for this path
    sum = s(1, 1);
    for p = 1:n_step
        sum = sum + s(p+1, node_matrix(k, p));
    end
    avg_price(k, 2) = sum;
end

Answer 1

you’ve overridden the function sum and now it is considered a local variable

 sum = s(1, 1);

thus you are hiding sum as function.

Change the variable name and do

 clear sum

.