Why don't we just amortize the loan amount across the payments?
For example, instead of defining the rate r in this fashion:
1=r(v+v^2+...+v^n)+v^n
why not define the rate r' with r' > r in this fashion:
1=r'(v+v^2+...+v^n)
For example, instead of defining the rate r in this fashion:
1=r(v+v^2+...+v^n)+v^n
why not define the rate r' with r' > r in this fashion:
1=r'(v+v^2+...+v^n)
Why Are Interest Rate Swaps Structured Like Bonds?
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