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Mathematics, 19.10.2019 04:20 hapjajsjjz3738
Linear combinations of cash flows. we consider cash flow vectors over t time periods, with a positive entry meaning a payment received, and negative meaning a payment made. a (unit) single period loan, at time period t, is the t-vector lt that corresponds to a payment received of $1 in period t and a payment made of $(1 + r) in period t + 1, with all other payments zero. here r > 0 is the interest rate (over one period). let c be a $1 t β 1 period loan, starting at period 1. this means that $1 is received in period 1, $(1 + r) t β1 is paid in period t, and all other payments (i. e., c2, . . , ct β1) are zero. express c as a linear combination of single period loans.
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Linear combinations of cash flows. we consider cash flow vectors over t time periods, with a positiv...
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