Using the price-yield Formula 2.5 for a bond with a periodic coupon of (C / m) with
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Using the price-yield Formula 2.5 for a bond with a periodic coupon of \(C / m\) with \(N\) remaining coupons, show that \(P(N, m, C, y) \times(1+y / m)^{N}\) equals the sum of all coupon payments reinvested to maturity at the periodic rate of \(y / \mathrm{m}\) plus the principal payment paid at maturity.
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Heres the demonstration using the priceyield formula Formula 25 to show the equivalence 1 PriceYield Formula The priceyield formula Formula 25 for a b...View the full answer
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Related Book For
Mathematical Techniques In Finance An Introduction Wiley Finance
ISBN: 9781119838401
1st Edition
Authors: Amir Sadr
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