Abstract
The transition for students from theory to practice is often abrupt and awkward. An example is the pricing of a bond that is between coupon payments. In this situation, students of finance may benefit from further exploration of the effect of compound interest before learning of the method that financial markets actually use to determine the price an investor must pay. This paper explores the confusing link between theoretical pricing of coupon bonds and the practice used by financial markets. Common financial calculators are used as a bridge to highlight this connection.
Recommended Citation
(2005)
"The Pricing of Bonds between Coupon Payments:From Theory to Market Practice,"
Journal of Economics and Finance Education: Vol. 4:
Iss.
2, Article 6.
Available at:
https://scholarship.rollins.edu/jefe/vol4/iss2/6
