Show that when / and g provide income at rates qf and qa, respectively, equation (21.15) becomes
Question:
Show that when / and g provide income at rates qf and qa, respectively, equation (21.15)
becomes KQTJ
(Hint: Form new securities /* and g* that provide no income by assuming that all the income from / is reinvested in / and all the income in g is reinvested in g.)
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