AuthorTopic: bootstrapping
@2010-05-14 20:51:23
can someone explain this. The textbook says, " the basic principle underlying bootstrapping is that the value of a treasury coupon security is equal to the value of the package of zero-coupon treasury securities that duplicates the coupon bonds cash flows. My question is how can zero-coupon bonds duplicate the cash flows of coupon paying bonds when by def they have no cash flows, except for the final cash flow?

CFA Discussion Topic: bootstrapping

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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz