PPT Slide
Given the spot rate curve for Treasury securities, find the fair price of a Treasury bond.
An 8% bond maturing in 10 years (par value = $100).
Each cash flow is discounted by the discount factor for its time. For example, the discount factor of the coupon paid 8 years later is
Each cash flow is discounted by the discount factor for its time. For example, the discount factor of the coupon paid 8 years later is