to par, orabove parand if they are the same then the bond is selling at its nominal, or par, value. Zero-coupon bonds are always sold at a discount to nominal value, because the investor does not receive interest until the bond matures. The formula for calculating bond market value is...
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However, short-run aggregate demand only measures total output for a single nominal price level or the average of current prices across the entire spectrum of goods and services produced in the economy. Aggregate demand only equals GDP in the long run after adjusting for price level. GDP=C+I+...
as used for the number of periods, n. If only a nominal interest rate (rate per annum or rate per year) is known, you can calculate the discount rate using the following formula:where • r = nominal annual interest rate • k = number of compounding periods per year • p = ...