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My issue is prompted by the provided answer and explanagion for Q16 in Mock Exam A. Because the floating rate used to generate the first year payment is not given, the methodology discounts the future cash flows from years 2 and years 3 (including the notional "principle") back to year 1 using...

Hull uses continuous compounding for the yield in his bond pricing examples. In the sample question P1.T3.170.3 we are asked to compute the dirty price of a bond where the yield is given an 6% without any explicit compounding interval assumption. The solution uses a calculator to compute the...