Page # 305 1. A. If we are discounting should we not use the exponential discounting? B0(720) = 1/[1+0.0665(720/360)] = 1/[1+0.0665 * 2] Why is this not B0(720) = 1/[1+0.0665]^2 Any thoughts?
720-day rate, by convention is annualized rate. therefore u have to X 2 to get the correct periodic