Pure discount bonds and perpetuities can be viewed as the polar cases of bonds. The value of
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Pure discount bonds and perpetuities can be viewed as the polar cases of bonds. The value of a pure discount bond (also called a zero coupon bond, or simply a zero) is:
PV l
F
( R)T The value of a perpetuity (also called a consol) is:
PV
C R LO.1
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