This note addresses the price of spot and forward interest refers to the price of the bond and to each other. After determining the spot and forward rates, the note shows how to estimate the spot rates on the data, or zero-coupon bonds and coupon bonds. It also shows how to express these rates for these various assumptions recipe. The note emphasizes the understanding of how the arbitration power in the market establish the relationship between forward and spot rates, and, as the output of a single set of rates from others. The note deepens understanding of the relationship of prices, assuming that the reader is familiar with the present value of the equipment. This is a useful springboard for the topic (eg, swaps), which require familiarity with the spot and forward rates.
This Darden study. "Hide
by Robert S. Harris, Robert M. Conroy Source: Darden School of Business 12 pages. Publication Date: February 5, 2007. Prod. #: UV0847-PDF-ENG
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