Question

I’m new to Matlab and reading Numerical Methods in Finance so this should be a basic question. The code in the book is as follows:

settle = ’19-Mar-2000′;

maturity = ’15-Jun-2015′;

face = 1000;

couponRate = 0.05;

yields = 0.01:0.01:0.20;

[cleanPrices , accrInts] = bndprice(yields, couponRate, settle, maturity, 2, 0, [],[],[],[],[],face);

However it returns the following error

??? Error using ==> rdivide
Matrix dimensions must agree.

Error in ==> bndprice at 218
PerDisc = 1./(1 + Yield./Frequency);

If I put in a single yield it works fine. Any clue as to why there is an issue with the yields?

Answer 1

you’re going to find this ridiculous, but you need to rearrange yields…

[cleanPrices , accrInts] = bndprice(yields', couponRate, settle, maturity, 2, 0, [],[],[],[],[],face);

ahh when the small things go wrong