Examlex
The "risk-free" interest rate is the sum of:
Annual Rate of Decline
The percentage at which a value decreases over the course of one year.
Strip Bond
A debt security that has had its principal and coupon payments detached and sold separately as zero-coupon bonds.
Compounded Semi-Annually
Interest that is computed and added to the original amount every six months, resulting in compound interest.
Compounded Annually
A method where interest is added to the principal balance once a year, affecting the total interest earned or paid.
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