Hi, Can someone kindly explain how the following instantaneous spot rate formula is arrived at: Please also help with the instantaneous forward rate formula:
Hello I'm not convinced by that formula for the instantaneous spot rate in the Core Reading, not sure the notation is entirely accurate. I think the instantaneous forward rate formula is fine. I've had a go at explaining where the formulae for the instantaneous forward and spot rates come from in the attached. Hope it's useful, get back to me if you still have queries. Anna