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Use partial derivatives to find the implicit derivative
Premium
An amount paid in addition to a standard rate or principal, often associated with insurance policies or bond prices over par value.
Discount
A reduction applied to the price of goods, services, or securities, either for promotional purposes or to reflect the present value of future cash flows.
Future Cash Flows
The amount of money, both incoming and outgoing, that is expected to be generated or expended in the future.
Valuing Bonds
The process of determining the present value of future cash flows from a bond, influenced by interest rates, the bond's coupon rate, and time to maturity.
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