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Your term_1, which represent the zero coupon rates, are expressed in %. You have to divide the values by 100 to compute discount factors.


First of all you need to get the YTM. The parametric model has an economic interpretation so coupons would mess the estimation and the interpretation of your model. Because of that the values of both taus must be restricted so you can avoid multicoliniarity. If they are the same you are saying that both curvatures are on the same tenor but then your model is ...

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