But doesn't that conflict with what is in the notes?
P x (1 + i)^(n/365) = 100
That's the formula that's in the notes.
So on reconsideration, am I right to assume then that i is not a rate that is set by the specific bond, but more a by-product of the price it was purchased at, P, and the price at redemption, in this case £100? I thought i was associated with a government bill the same way D and c are associated with bonds.
Thanks
Last edited by a moderator: Sep 28, 2010