Question: Using Table 4.2, show that the bond payments can be regarded as payments on two separate loans. The first loan is of amount F with

Using Table 4.2, show that the bond payments can be regarded as payments on two separate loans. The first loan is of amount F with interest only at rate j (per coupon period) for n periods, plus return of F at the end of n periods. The second loan is an amorti- zation of P-F over n periods at effective rate j (per coupon pe- riod), with payments of F(r-j) per coupon period. This second loan is the amortization of premium if P>F

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