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At time t an investor shorts a $1 face value zero coupon bond that matures at time T = t
and uses the entire proceeds to purchase a zero coupon bond that matures at time S = T.
(a) In what quantity is the zero coupon bond that matures at time S purchased? Your answer should be expressed in terms of the time t prices P(t;T) and P (t;S).
(b) Explain why these transactions are equivalent to agreeing to lend over the future period [T, S] at a rate that is determined at time t.
(c) What is the continuously compounded forward rate f(t;T;S) associated with this loan?
All the number sets we have seen above put together comprise the real numbers. Real numbers are also inadequate in the sense that it does not include a quantity which i
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tens digit of a 2-digit number is twice its unit digit. If the sum of the digit is 12, find the number.
what is a linear equation?
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