**BOND PRICING**

Wait until calculator button appears. *Sometimes You Need To Press Refresh*

The price of a bond is the present value of its future cashflows.

If we consider a coupon bond like a US goverment bond (T-Bond),

the cash flows look like

If we consider a coupon bond like a US goverment bond (T-Bond),

the cash flows look like

The current price of the bond is
with discrete compounding,

and with continous compounding.

The interest rate is fixed,

which means that the term structure is flat.

and with continous compounding.

The interest rate is fixed,

which means that the term structure is flat.

Convexity measures the curvature of the approximation done

when using duration.

It is calculated as Simple Duration where

C(t) is the cashflow in period t

when using duration.

It is calculated as Simple Duration where

C(t) is the cashflow in period t