function lkly = findlk3(tpars,x,xc,logrf,logspret,minage,c,d,h,lvgrid,maxT,which,bankhand,stockind,dok);
% proc to evaluate likelyhood function */
% returns - log likelyhood so that optmum can minimize */

global RECORD TEST; 
numdel = 0;

    huge = inf; % huge value to send back for zero probabilites, other states to be avoided
    
    if TEST == 2; 
        lkv = zeros(rows(x),4);  % keep track to see most influential observations and their character
                                 % 1: likelyhood of this obs. 2: category number          
    end; 
    
    % check for wild parameters that will bomb likelyhood
    % if so, reset to boundary and add a graduated continuous penalty to
    % keep L out of here. 
    xlow = trans3(   -1,-10    ,0.1 ,0.01 ,0.1 ,0.1 ,0.000001,which); 
    xhi  = trans3(    1, 10    ,5   ,1.5  ,10 ,   10,0.999999,which); 
       
    penalty = sum( (tpars<xlow).*(xlow-tpars) + (tpars>xhi).*(tpars-xhi));
    if (penalty>0)&(TEST == 1);
        disp('findlk3 parameter values outside bounds. resetting parameters and adding penalty. original transformed parameters'); 
       disp([tpars'])
    end; 
    penalty = 1E6*penalty^2;
    tpars = (tpars<xlow).*xlow+(tpars>xhi).*xhi+((tpars>=xlow)&(tpars<=xhi)).*tpars; % reset offending parameters to limit
       
    % recover parameters from transformed
    [gam,delt,sig,k,a,b,pim] = back3(tpars,which);
    if which(7) == 0;  % if not searching over measurement error, set it to zero
        pim = 0; 
    end; 
    if which(1) == 0; % this is used as code to impose alpha = 0;
        if stockind == 0; 
           % ER = 400*(exp(gam+1/2*sig^2)-1);
             gam = log(1+(15/400))-1/2*sig^2 ; % this will force ER = 15% annually
         elseif (stockind == 1); 
            mlogrf = mean(logrf);
            mum = mean(logspret);
            sigm = std(logspret);
            gam = -log( exp(delt*(mum-mlogrf)+1/2*delt^2*sigm^2+1/2*sig^2)*...
                     (1+(exp(delt*sigm^2)-1)*(exp(-(mum-mlogrf)-1/2*sigm^2)-1)/(exp(sigm^2)-1))); % this reverse engineers the formula use to calculate alpha so it will be 0
        else; 
             disp('findlk3 error: trying to impose alpha = 0 for model other than SP500 or no stock. Needs more programming to do this.'); 
         end; 
    end; 
            

    if (TEST == 1); 
 	    disp('findlk3 trying transformed, actual gam delt sig k a b'); 
        disp([tpars'])
        disp([gam delt sig k a b pim]);
    end;        
    
    % check for k off the bottom of the grid. We really have to keep this
    % from happening. (Above may keep this from happening, but code kept
    % just to be sure
    if (log(k) <= min(lvgrid))|(log(k) > max(lvgrid)); 
        disp('findlk3 being asked for k < min of grid or > max of grid -- sending back huge likly. SHOULD NOT SEE THIS. ');
        disp('better to raise penalty in findlk3 so that the likelyhood function is continuous'); 
        lkly = huge; 
        RECORD = [RECORD ; tpars'  lkly];
        return; 
    end; 
        
    begdatinx = 0; % initialize date in quarters since 87 */

    if stockind == 0;                           % with no stock index you only have to do sim once as beginning date is irrelevant
        [pnoseet,pseeipt,pnosipt,pseebkt,pnosbkt] = sim3(gam,delt,sig,k,a,b,pim,c,d,0,logrf,logspret,lvgrid,stockind,dok,0); % beg date 0 since not used
    end; 
      
    % now loop through data, find probability of each data point, add up */

    lkly = 0;
    for il=1:rows(x);

       if (TEST == 1)&(il<5); 
           disp('il'); disp(il);
       end; 
       
       newbeg = ddate(x(il,4));                    % find beginning date of this observation */
       outdat = x(il,7);
       newbeginx = floor((newbeg-1987)*4)+1;       % should be the quarter in  which this project starts */
       if newbeginx ~= begdatinx;                  % If this observation has a new begin date, do sim again  */
            if stockind > 0;                                 % version with stock index 
                 [pnoseet,pseeipt,pnosipt,pseebkt,pnosbkt] = sim3(gam,delt,sig,k,a,b,pim,c,d,newbeginx,logrf,logspret,lvgrid,stockind,dok,0);
            end; 
            begdatinx = newbeginx;
       end;       % all logic maintained for version with no stock so that ages are calculated right, using begdat below.  
               
       
    % categories of observation:
    %   1. Ipo/acquired/another round, have good dates and return
    %   2. Ipo/acquired/another round, good dates but return bad
    %   3. Ipo/acq/another round, bad return and bad dates
    %   4. Still private, age to end of data set
    %   5. Out of business, date known
    %   6. Out of business, date unknown
    %
    

     % 1. ipo/acq with good date and return data */
        if  xc(il) == 1; 
                        
            ageindx = floor((ddate(outdat)-1987)*4)+1 - begdatinx; % quarter of exit with 1987:1 = 1 - start*/   
            logV = log(x(il,10));   % xcase tested to make sure no zeros. doit3 changed zero returns to out of business. 
            [trash, logVindx] = min(abs(logV-lvgrid)); % find nearest value gridpoint 
            clear trash;
            if ageindx <= minage*4;  % treat dates less than minage as "on or before"
                 newprob = sum(pseeipt(1:min([minage*4;size(pseeipt,1)]),logVindx)); % at end of sample can't do minage*4
            else; 
                newprob = pseeipt(ageindx,logVindx);
            end; 
           	if newprob > 0;
               	lkly = lkly + log(newprob);
            else;
                lkly = huge; % now taking zero probabilities as serious. Send back a huge likelyhood function. 
                RECORD = [RECORD ; tpars'  lkly];
                return; 
            end; 
            if TEST == 2; 
              lkv(il,:) = [log(newprob) 1 ageindx logV]; 
            end; 

            
%                   used in the past to debug zero probabilities that were
%                   results of bugs, especially in sim3. 
%               	disp('findlk3 ERROR: pseeipt says this event is impossible. Adding 1k to ln L. i ='); disp(il);
%                	disp('ageindx '); disp([ageindx ]);
%                	disp('Vindx and lnV'); disp([logVindx logV]);
%                	disp( [ (x(il,:))]);
%                	disp('par gam delt sig k a b');disp([gam delt sig k a b]);
%                 disp('workspace saved in sim3'); 
%                 lkly = lkly + 1000 ; % This should really discourage minimizer from going here. 
%                 save sim3; 
%           	end;

         %disp(x(il,1:10));
         %disp([il ddate(outdat)-newbeg ageindx logV logVindx lvgrid(logVindx) log(newprob)]); 
        		
                
        % 2. ipo/acq/another round with bad return but good dates */

        elseif xc(il) == 2; 
         	ageindx = floor((ddate(outdat)-1987)*4)+1 -begdatinx; 
            if ageindx < minage*4; 
                newprob = sum(pnosipt(1:min([minage*4;size(pnosipt,1)]))); 
            else; 
                newprob = pnosipt(ageindx); 
            end; 
            if newprob > 0;
              	lkly = lkly + log(newprob);
            else;
                lkly = huge; % now taking zero probabilities as serious. Send back a huge likelyhood function. 
                RECORD = [RECORD ; tpars'  lkly];
                return; 
%                  disp('findlk3 ERROR pnosipt(ageindx) = 0. i, x'); disp(il); disp(1:10); disp(x(il,:));
%                  disp('par gam delt sig k a b'); disp([gam delt sig k a b]);
            end;
            if TEST == 2; 
              lkv(il,:) = [log(newprob) 2 ageindx -99]; 
            end; 
            
        % 3. ipo/acq with bad return and bad end date */

        elseif xc(il) == 3; 
            ageindx = 54 -begdatinx;        % qtr exit - start -- on or before end of sample */

            if sum(pnosipt(1:ageindx)) > 0;
                newprob = sum(pnosipt(1:ageindx)); 
                lkly = lkly + log(newprob);
            else;
                lkly = huge; % now taking zero probabilities as serious. Send back a huge likelyhood function. 
                RECORD = [RECORD ; tpars'  lkly];
                return;                  
%                 disp('findlk3 ERROR sum(pnosipt(1:ageindx)) = 0. i.x '); disp(il); disp(1:10); disp(x(il,:));
%                 disp('par gam delt sig k a b'); disp([ gam delt sig k a b ]);
            end;
            if TEST == 2; 
              lkv(il,:) = [log(newprob) 3 ageindx -99]; 
            end; 

            
        % 4. still private, good dates */

        elseif xc(il) == 4; 
                 
            ageindx = 54 - begdatinx;             % qtr exit - start */

            if pnoseet(ageindx) > 0;
                newprob = (pnoseet(ageindx)); 
                lkly = lkly + log(newprob);
            else;
                lkly = huge; % now taking zero probabilities as serious. Send back a huge likelyhood function. 
                RECORD = [RECORD ; tpars'  lkly];
                return; 
%                  disp('findlk3 par gam delt sig k a b'); disp([gam delt sig k a b]);
%                  disp('findlk3 ERROR: pnoseet(agindx) = 0 i x'); disp(il); disp(1:10); disp(x(il,:));
            end;
            if TEST == 2; 
              lkv(il,:) = [log(newprob) 4 ageindx -99]; 
            end; 


        % 5. Bankrupt, dates ok */

        % A: if bankhand says use the dates */

%         elseif xc(il) == 5.1;
%             disp('findlk3 error. this should no longer be used'); 
%        		ageindx = floor((ddate(outdat)-1987)*4)+1; % quarter of exit */
%             ageindx = ageindx - begdatinx;             % qtr exit - start */
%             if ageindx > 0;
%              	if pseebkt(ageindx) > 0;
%                  	lkly = lkly + log(pseebkt(ageindx));
%              	else;
%                    disp('findlk3 ERROR A: pseebkt(ageindx) <= 0 i,x'); disp(il); disp(x(il,:));
%                    disp('par'); disp([ gam delt sig k a b]);
%              	end;
%             else;
%                 numdel = numdel + 1;
%             end;
% 
%           % B: treat dates as bad */
%         elseif xc(il) == 5.2; 
%             disp('findlk3 error. this should no longer be used'); 
%             ageindx = 54;
%             ageindx = ageindx - begdatinx;             % qtr exit - start */
% 
%             if sum(pnosbkt(1:ageindx)) > 0;
%                 lkly = lkly + log(sum(pnosbkt(1:ageindx)));
%             else;
%                 disp('findlk3 ERROR B : sum(pnosbkt(1:ageindx)) <= 0)'); disp(il); disp(x(il,:));
%                 disp([gam delt sig k a b]);
%             end;

        % C: use dates to infer bankrupt 'on or before' given date */
        elseif xc(il) == 5.3;

            ageindx = floor((ddate(outdat)-1987)*4)+1 - begdatinx; 
            if ageindx > minage*4;
             	if sum(pseebkt(1:ageindx)) > 0;
                    newprob = (sum(pseebkt(1:ageindx))); 
                 	lkly = lkly + log(newprob);
             	else;
                    lkly = huge; % now taking zero probabilities as serious. Send back a huge likelyhood function. 
                    RECORD = [RECORD ; tpars'  lkly];
                    return; 
%                    disp('findlk3 ERROR C sum pseebkt(ageindx) <= 0 '); disp(il); disp(x(il,:));
%                    disp([gam delt sig k a b]);
               end;
            end; 
            if ageindx <= minage*4;
             	if sum(pseebkt(1:min([minage*4;size(pseebkt,1)]))) > 0;
                    newprob =  (sum(pseebkt(1:min([minage*4;size(pseebkt,1)]))));
                 	lkly = lkly +log(newprob);
             	else;
                    lkly = huge; % now taking zero probabilities as serious. Send back a huge likelyhood function. 
                    RECORD = [RECORD ; tpars'  lkly];
                    return; 
%                    disp('findlk3 ERROR D sum pseebkt(minage) <= 0 '); disp(il); disp(x(il,:));
%                    disp([gam delt sig k a b]);
               end;
            end;
            if TEST == 2; 
              lkv(il,:) = [log(newprob) 5 ageindx -99]; 
            end; 

           
        % 6. Bankrupt, dates not ok */
        
        elseif xc(il) == 6; 
            ageindx = 54 - begdatinx;             % qtr exit - start */

            if sum(pnosbkt(1:ageindx)) > 0;
                newprob = (sum(pnosbkt(1:ageindx))); 
                lkly = lkly + log(newprob);
            else;
                    lkly = huge; % now taking zero probabilities as serious. Send back a huge likelyhood function. 
                    RECORD = [RECORD ; tpars'  lkly];
                    return; 
%                 disp('findlk3 ERROR D: sum(pnosbkt(1:ageindx)) <= 0/'); disp(il); disp(x(il,:));
%                 disp([gam delt sig k a b]);
            end;

            if TEST == 2; 
              lkv(il,:) = [log(newprob) 6 ageindx -99]; 
            end; 

        % make sure we have every one */

        else;
           disp('findlk3 Observation Does not fit in a category. Observation:');
           disp(il); disp(x(il,:));
        end;

        if (TEST == 1)&(il<5); 
            disp(' ageindx lkyly so far'); 
            disp([ageindx lkly]); 
        end; 
        
    end;

lkly = -lkly+penalty;

if TEST == 2; 
    lkv(:,1) = -lkv(:,1); 
    [lkvsort indx] = sort(lkv(:,1));
    disp('10 most influential observations  and their contrib to lkly');
    sp = x(indx,:);
    disp(' co. no.    round date     post value      exit date   exit typ    post value '); 
    sp = [sp(:,[1 4 6 7 8 9 10]) 12*(ddate(sp(:,7))-ddate(sp(:,4))) lkv(indx,:)]; 
    disp(sp(end-10:end,1:6)); 
    disp(' co no gross ret    age(mo)     lkly contrib     category     agindx      logV');
    disp([sp(end-10:end,1) sp(end-10:end,7:end)]);
    disp('categories: 1: ipo etc good data. 2: ipo bad r good dates 3: ipo etc., bad r and bad date 4: private good dates 5: out, good dates 6: out, bad dates'); 
    TEST = sp; % use test to return sp to main program. as global. 
end; 
        
if (TEST == 1); 
   disp('findlk3 likelyhood 1/E04 '); 
   disp([lkly/1E4]);
end; 

RECORD = [RECORD ; tpars'  lkly];
return;