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Please help with part b. Thank you. 11. (Running PV example) A (yearly) cash flow stream is x = (-40, 10, 10, 10, 10, 10,
Please help with part b. Thank you.
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,k and use them to determine the (net) 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. 2. (Spot update) Given the (yearly) spot rate curve s = (5.0,5.3,5.6,5.8,6.0.6.1), find the spot rate curve for next year. 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,k and use them to determine the (net) 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. 2. (Spot update) Given the (yearly) spot rate curve s = (5.0,5.3,5.6,5.8,6.0.6.1), find the spot rate curve for next yearStep by Step Solution
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