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For the following bond,

Par value $1,000

Coupon rate 8% paid annually

Time to maturity 3 years

Interest rate 4%

What is the convexity? Also, if the interest rate increases from 4% to 5% , what is the price change due to the convexity?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92430710

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