Serving the Quantitative Finance Community
How to discount cash flow
I was asked to build a model to calculate tranch present value1. You can assume a simple process for the cash flow(underlying is corporate bond)2. Then discount to current time(maybe I need to consider interest rate, default rate)But I feel I have no idea to discount cash flow, real measure, or risk netural measure???Anyone can give me some paper to read or help me to buid a model?Highly appreciate any help!