Econ110BW11 - Lec6 A - GR_ol

Econ110BW11 - Lec6 A - GR_ol - Macroeconomics B Econ 110B...

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Macroeconomics B Econ 110B–Winter 2011 Prof. Giacomo Rondina Lecture 6
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Plan for Lecture 6 Yield Curve and Economic Activity 2 Financial Markets and Expectations (Ch. 15)
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Pricing Zero Coupon Bonds 3 Financial Markets and Expectations (Ch. 15) () ( ) ( ) ( ) 1, 1 2, 11 1 3, 1 1 2 , 1 1 2 1 1 $ $ 1 $ $ $ $ 1 $ $ 1 1 1 ...... 1 t t t e tt t ee t nt e t t n V P i V P ii V P i V P i i + ++ + = + = = + = + + #
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Pricing Zero Coupon Bonds : Yields to Maturity 4 Financial Markets and Expectations (Ch. 15) () ( ) ( ) ( ) 1, 1 2, 2 11 1 2 3, 3 1 1 2 3 , 1 1 2 1 1 $ $ 1 $$ $ 1 $ 1 1 $ 1 1 1 ...... 1 1 t t t e tt t t ee t t nt n e t t n V P i VV P ii i P i i P i i i + ++ + = + == + + + + + + #
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Pricing Zero Coupon Bonds : Yields to Maturity 5 Financial Markets and Expectations (Ch. 15) () 1, 1 2, 2 2 3, 3 3 , $ $ 1 $ $ 1 $ $ 1 $ $ 1 t t t t t t nt n V P i V P i V P i V P i = + = + = + = + #
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Pricing Zero Coupon Bonds : Yields to Maturity 6 Financial Markets and Expectations (Ch. 15) () ( ) ( ) ( ) 11 22 1 1 1 2 2 2 3 3 33 1 1 1 1 2 3 3 3 1 1 2 1 1 $$ $ 1 1$ $1 1 1 1 $ 1 1 1 1 1 $ 1 1 1 1 . . . 1 1 $ 1 B tt B Be t t B t t e t t t B t t e e n n nt t t t t n n B VV Pi iP i i P i i i i P i i i i i P i + ++ +
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This note was uploaded on 01/18/2012 for the course ECON 101 taught by Professor Bansak during the Summer '07 term at San Diego State.

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Econ110BW11 - Lec6 A - GR_ol - Macroeconomics B Econ 110B...

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