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Suppose a new 5 year FRN pays a coupon of 3 months SOFR +0.20%, and is issued at par (100.00). If the perception of the credit-worthiness of the issuer goes down, investors will demand a higher interest rate, say SOFR +0.25%. If a trade is agreed, the price is calculated. In this example, SOFR +0.25% would be roughly equivalent to a price of 99.75.
If the price falls from $16 to $10 and the quantity rises from 80 units to 100, however, the price decline is 37.5% and the quantity gain is 25%, an elasticity of (+ %) / (%) = for the same part of the curve. This is an example of the index number problem. [15] [16]
Mathematical description. The raised-cosine filter is an implementation of a low-pass Nyquist filter, i.e., one that has the property of vestigial symmetry. This means that its spectrum exhibits odd symmetry about , where is the symbol-period of the communications system. Its frequency-domain description is a piecewise -defined function, given ...
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