11. (Running PV example) A (yearly) cash flow stream is x = (-40, 10, 10, 10, 10,...

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11. (Running PV example) A (yearly) cash flow stream is x = (-40, 10, 10, 10, 10, 10, 10). The spot rates are those of Exercise 2.

(a) Find the current discount factors do and use them to determine the (ne!) present value of the stream

(b) Find the series of expectations dynamics short-rate discount factors and use the running present value method to evaluate the stream.

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Investment Science

ISBN: 9780195391060

1st International Edition

Authors: David G. Luenberger

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Question Posted: Jul 29, 2024 07:09 AM

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11. (Running PV example) A (yearly) cash flow stream is x = (-40, 10, 10, 10, 10,...

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Investment Science

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