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Explain briefly PPP and IRP. Why might the latter hold better than the former over time?
Effective Interest Method
A technique used in accounting to allocate loan discounts or premiums over the life of the loan to the periods benefiting from the loan, reflecting a constant rate of interest.
Carrying Amount
The book value of an asset or liability; for assets, it is typically based on original cost less depreciation.
Straight-Line Amortization
A method of evenly allocating the cost of an intangible asset over its useful life.
Callable
A term used to describe a financial security that the issuer can redeem prematurely under specific conditions.
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