# Question: Some authors give the following formula for the approximate convexity

Some authors give the following formula for the approximate convexity measure:

where the variables are defined as in equation (4.24) of this chapter. Compare this formula with the approximate convexity measure given by equation (4.24). Which formula is correct?

where the variables are defined as in equation (4.24) of this chapter. Compare this formula with the approximate convexity measure given by equation (4.24). Which formula is correct?

## Answer to relevant Questions

(a) How is the short-end duration of a portfolio computed? (b) How is the long-end duration of a portfolio computed? (c) How is the short end and long end of a portfolio defined? (d) Suppose that the SEDUR of a portfolio is ...State why you would agree or disagree with the following statement: When interest rates are low, there will be little difference between the Macaulay duration and modified duration measures. You are a financial consultant. At various times you have heard comments on interest rates from one of your clients. How would you respond to each comment? (a) Respond to: “The yield curve is upward-sloping today. This ...The yield spread between two corporate bond issues reflects more than just differences in their credit risk. What other factors would the spread reflect? A client observes that a corporate bond that he is interested in purchasing with a triple A rating has a benchmark spread that is positive when the benchmark is U.S. Treasuries but negative when the benchmark is the LIBOR ...Post your question