Hello, could anyone explain why the spot rate for 4 periods (s4) should be divided by 2, and then powered to 4 which becomes (1+ s4/2)^4 as discount factor? Hope the question is clear - not easy indeed!作者: ajpheif16 时间: 2011-7-11 18:43
Probabaly because the spot rate given is an annual rate on BEY basis
