10 Year Treasury Note Calculation
Hey guys, I'm trying to calculate a 10 year treasury note, but not sure what interest rate I should use to discount the cashflows. I was thinking using the LIBOR curve.
Any ideas?
Thank you in advance!
I'm not sure what you're asking... You're trying to calculate the price of the 10yr note? You don't use LIBOR for this... You use either the spot rate, forward rate or the par rate. It depends on what you're trying to do...
Use the spot rate, but you will have to find the spot rate by bootstrapping the zeros. Unless you know the forward rate and you can work backwards and get the spot rate from this method.
Using the par rate doesn't make sense because you'll be discounting all of the cash flows with a single rate.
Are you trying to calculate the price of the 10y, as opposed to using the market price?
What is the context for this?
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