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9. (15 points) We know that the price of a zero-coupon bond is calculated by F P = (1 + R)' (1) where P is
9. (15 points) We know that the price of a zero-coupon bond is calculated by F P = (1 + R)' (1) where P is the market price of the bond, F is the face value, R is annual percentage rate (APR), and t is the number of years to maturity. Prove the inverse relationship between the bond price and the interest rate. (Hint: Use the first order derivative of CR)
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Economics And Personal Finance
Authors: Irvin Tucker, Joan Ryan
1st Edition
1133562108, 978-1133562108
