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  1. J

    Basic discount factor question

    From Tuckman second edition. 108+31.5/32=7.125(d.5)+107.125d(1). If d(.5) is . 97557 solving for d(1) is .95247. I multiply ( .97557 x 7.125) then add result to 107.125? Then solve the problem to get d(1) .95247. I only ask because I keep getting around .953 and am I worried I am wrong...
  2. Nicole Seaman

    P1.T4.900. Discount function and the Law of One Price (Tuckman, Ch.1)

    Learning objectives: Define discount factor and use a discount function to compute present and future values. Define the “law of one price,” explain it using an arbitrage argument, and describe how it can be applied to bond pricing. Identify the components of a US Treasury coupon bond, and...