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Basic Definitions

This chapter covers some basic definitions of Interest Rates.

First defined are Bank Accounts and Short Rates., followed by Zero Coupon Bonds.

Continuously Compounded, Simply Componded and Annually Compunded spot rates follow.

This is followed by a definition on Forward Rates and in particular the instantatneous forward rate.

Finally we move on to Interest Rate Swaps, Caps, Floows and Swaptions