Financial Toolbox

cfconv

Cash flow convexity

Syntax

CFlowConvexity = cfconv(CashFlow, Yield)

`CashFlow`	A vector of real numbers.
`Yield`	Periodic yield. A scalar. Enter as a decimal fraction.

CFlowConvexity = cfconv(CashFlow, Yield) returns the convexity of a cash flow in periods.

Given a cash flow of nine payments of $2.50 and a final payment $102.50, with a periodic yield of 2.5%

CashFlow = [2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 102.5];

Convex = cfconv(CashFlow, 0.025)

Convex =

    90.4493 (periods)