Calculate Balances Based on Initial Balance and Vector of Ratios

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Description

Calculates vector of balances based on initial balance and vector of ratios from one time point to the next (i.e. proportion gains + 1). This is a simple function containing this R code: initial * cumprod(ratios)

Usage

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balances(ratios, initial = 10000)

Arguments

ratios

Numeric vector of ratios between subsequent stock prices (i.e. proportion gains + 1). For example, if a stock gained 3%, lost 1%, then lost 2%, ratios would be c(1.03, 0.99, 0.98).

initial

Initial balance.

Value

Numeric vector indicating balance at each time point.

Author(s)

Dane R. Van Domelen

References

Acknowledgment: This material is based upon work supported by the National Science Foundation Graduate Research Fellowship under Grant No. DGE-0940903.

See Also

final.balance

Examples

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# Randomly generate daily stock gains over a 5-year period
stockgains <- rnorm(251*5, 1.001, 0.02)

# Create vector of balances if initial balance is $10,000
bals <- balances(stockgains)

# Plot results
plot(bals)

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