Use equations to describe how bond prices are determined for three (3) different fixed-income market instruments discussed in this course. Define each variable in your equations. What is the relationship between bond yields and bond prices for each instrument? What is the impact on its share price if a company that has paid large and growing dividends in the past now commits to no longer ever paying dividends in the future? Explain. Use models of money or bond markets to explain and provide at least two (2) reasons why the Government of Canada yield curve can be downward sloping.
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