1.3 Money - discounting and present values

This paper provides a background on:

·        The time value of money

·        The calculation of discount factors

·        Discount securities, commercial paper, government bills

·        Annuities

·        Interpolation

·        Inflation and real interest rates

·        Bank of England published yield curves

·        Notions of arbitrage (developed further in later papers)

·        Descriptions of the yield curve (used in the papers on interest rate derivatives)

The paper has 11 pages and the Excel has 1 sheet