(b) (i) In a bond amortization schedule, what does the "book value" mean? Describe in words. [2] (ii) Consider a n-period coupon bond where the redemption amount, C may not be the same as the face amount, F. Using j and g to represent the yield rate per period and modified coupon rate per period respectively, show that, for k=0,1,2,⋯,n, the book value at time k,B k
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is B k
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=C+C(g−j)a n−1
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j, and the amortized amount at time k is PR k
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=C(g−j)v j
n−k+1
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. [6] (iii) Let K=Cv j
n
​
. The Makeham formula to compute the price of a bond is given by P=K+ j
g
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(C−K) A verbal interpretation for K would be that K is the present value of the redemption value C. Provide a verbal interpretation for (C−K).