# Defining a Function

I've been reading about functions in Mathematica and playing with this for hours, but I'm clearly missing something. The following code correctly calculates "fail", the number of failed scenarios.

I want to convert the code between the dashes to a function of the variable "spend" that returns the value of fail as the value of that function, in other words f[spend]:=fail. Can someone please show me how to do this while defining the code as a Module?

Thanks.

n = 10000; (* Number of samples to generate  *)
years = 30; (* Number  of years in each simulated scenario *)
mu = .056; (* Average portfolio rate of return *)
sigma = .11; (* Portfolio standard deviation *)
portfolio = 1000000; (* Initial portfolio value *)

withdrawal = .042; (* Annual spending percentage of initial portfolio value *)
returns = Table[1, {n}]; (* one scenario of market returns *)
spend = withdrawal*portfolio;

(* --------------------------- *)

fail = 0;

For[k = 1, k <= n, k++,
returns = RandomVariate[LogNormalDistribution[mu, sigma], {years}];
x = portfolio;

For[i = 1, i <= years, i++,
x = returns[[i]]*x - spend
];
fail = fail + If[x <= 0, 1, 0];
]

(* --------------------------- *)

Print["Failed: ", fail]

Print["Percent failed: ", N[fail/n, 3]]
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You just need fail as the last expression in the module, so that it gets returned:

f[spend_] := Module[{fail = 0, returns, x},
For[k = 1, k <= n, k++,
returns = RandomVariate[LogNormalDistribution[mu, sigma], {years}];
x = portfolio;
For[i = 1, i <= years, i++, x = returns[[i]]*x - spend];
fail = fail + If[x <= 0, 1, 0];];
fail]

A faster approach will be to generate all the returns at once and use Fold to do the iterative calculation and Total[UnitStep[...]] to count the negative results:

f[spend_] := Total[UnitStep[-Fold[Times[##] - spend &, portfolio, #] & /@
RandomVariate[LogNormalDistribution[mu, sigma], {n, years}]]]
• Thanks! Still cant see what I was doing wrong, but I think I was messing up the syntax around that last "fail" in the function. Your alternative is elegant. I'll need to study that for a while. Out of curiosity, should mu, sigma and years also be localized in the first approach? (I'm switching to your function, regardless.) May 3, 2015 at 17:02