Question: Our procedure for adjusting the return rates on credit instruments for differences in their terms is based on the fact that the repayment on a

Our procedure for adjusting the return rates on credit instruments for differences in their terms is based on the fact that
the repayment on a single payment loan can be divided into interest and principal.
long-term credit instruments have more interest risk than short-term credit instruments.
any long-term loan can be duplicated by a sequence of one-year loans.
the price of a bond is the present value of its payments at the market interest rate.
Our procedure for adjusting the return rates on

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