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Financial Formulas - Category Interpolation

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Interpolation is a mathematical technique that estimates values within a range based on known data points. In finance, it plays a pivotal role in predicting unknown financial values between observed data points. This method is crucial for constructing yield curves, pricing financial derivatives, and managing risk. By providing a means to estimate values at non-specific points in time, interpolation enhances the precision of financial models, aiding decision-making and analysis in various aspects of the financial industry.

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