CFA Level 2 | Fixed Income: Pathwise Valuation
CFA Level 2
Topic: Fixed Income
Learning Module: The Arbitrage-Free Valuation Framework
When given the interest rate path, draw the timeline and plot the cash flows and the 1-period interest rates. Then discount each cash flow individually to get the present value. The Texas BA II Plus's STO and RCL functions provide an easy way of computing the value of the bond using the pathwise valuation.
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