CFA CFA Level 1 Spot rates vs Annual Yield

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Spot rates vs Annual Yield

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    • Avatar of WithineWithine
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        These are present values of future payments, discounted at market interest rates. They reflect the current market’s assessment of the risk and future value of receiving that payment. In your example, if the spot rate is 6%, it means the market believes an 8% payment a year from now is only worth 6% today.

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