Get startedGet started for free

Alternative cash flow vector code

In the above example, you may have coded the cash flow vector by writing cf <- c(3, 3, 3, 3, 3, 3, 3, 103).

However, this may seem a bit tedious. An alternative is to code the cash flow vector using the rep() command. Typing rep(x, y) will automatically repeat x y times. For example, rep(1, 4) is equivalent to typing c(1, 1, 1, 1).

In this exercise, you'll construct a more general function for computing a cash flow vector based on a series of inputs: r for coupon rate, p for par value, and ttm for time to maturity. To do so, you'll take advantage of the rep() command.

This exercise is part of the course

Bond Valuation and Analysis in R

View Course

Exercise instructions

  • Code an alternative cash flow function using rep() and input variables r, p, and ttm. Save this new function as alt_cf.
  • Use alt_cf to generate a cash flow vector with coupon rate (r) of 3% (0.03), par value (p) of $100, and time to maturity (ttm) of 8 years.

Hands-on interactive exercise

Have a go at this exercise by completing this sample code.

# Code cash flow function
alt_cf <- function(r, p, ttm) {
  c(rep(p * r, ___ - 1), ___ * (1 + ___))
}

# Generate cf vector
alt_cf(r = ___, p = ___, ttm = ___)
Edit and Run Code