Question: If the (continuously compounded) yield curve is flat at a rate of 5%, answer the following questions: (a) Price a 10-year semiannual pay bond, with
If the (continuously compounded) yield curve is flat at a rate of 5%, answer the following questions:
(a) Price a 10-year semiannual pay bond, with a 5% coupon.
(b) Compute the duration of this bond.
(c) What is the convexity of this bond?
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