I think you mentioned using either forward or spot rates for discounting will get you the same result...im trying to understand this. I understand the link between spot, forwards and yields but seem to get muddled with which to use to discount cashflows to value the cashflows.
he's used forward rates to discount cash-flows and get prices, but you would get the same price using spot rates to discount cash-flows, as long as you recover the curve of spot rates from the curve of forwards using the no-arbitrage formula that links the two type of rates
Bionic is always the best
Very clearly explained , thanks !
I think you mentioned using either forward or spot rates for discounting will get you the same result...im trying to understand this. I understand the link between spot, forwards and yields but seem to get muddled with which to use to discount cashflows to value the cashflows.
he's used forward rates to discount cash-flows and get prices, but you would get the same price using spot rates to discount cash-flows, as long as you recover the curve of spot rates from the curve of forwards using the no-arbitrage formula that links the two type of rates
Thank you!
your "carry roll down" should be roll down and that coupon should be the carry
GOAT!
thank you so much for this. really nice. Do you have the excel by any chance?
make it simpler