How to Calculate Change in Zero-Coupon Bond Values: A Comprehensive Guide

How to Calculate Change in Zero-Coupon Bond Values: A Comprehensive Guide

Calculating the change in zero-coupon bonds (noun) involves determining the difference in their market values over time. For instance, if a zero-coupon bond is purchased at a price below its face value, its value will increase as it approaches maturity.

Understanding how to calculate this change is crucial for investors seeking to optimize their fixed income portfolios. The ability to accurately predict changes in zero-coupon bond values allows for informed investment decisions and effective risk management.

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