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Thank you so much for the help Prof. David, I'm assuming if the syntax for the first cash flow is correct, then I should also be able to the same for the second cash flow, i.e. 1 / (1 + 2yr spot rate) ^ 1.5 correct? Although the solution you suggest is clearly much more efficient

Hi Everyone !! Suppose that at time t = 0, I want to price a bond that pays annual coupon at t = 1, t = 2 and t = 3. Maturity is 3 years. Assume annual compounding for simplicity. The pricing at time t = 0 should be trivial because I can discount each of the coming 3 cash flows at the 1...

Thanks so much for the kind reply Prof. David ! So in practice, the correct approach would be to unwind or extract the spot (zero) curve FROM the given par curve, and then use this extracted zero curve to price any bond with 5 yrs remaining to maturity, no matter what the coupon is. In effect...

Hi Everyone, Say for example, that the 5 year par yield to maturity as per the treasury par yield curve is 6%. Does that mean that ALL treasury bonds that now have 5 years to maturity (regardless of what their original tenor was) must trade at a YTM of 6%? If it so happens that one such bond...