Question: 22. Answer the two questions below. a. Footnote 7 presents the formula for the convexity of a bond. Build a spreadsheet to calculate the convexity

22. Answer the two questions below. a. Footnote 7 presents the formula for the convexity of a bond. Build a spreadsheet to calculate the convexity of a 5-year, 8% coupon bond making annual payments at the initial yield to maturity of 10%. b. What is the convexity of a 5-year zero-coupon bond? oXcol Please visit us at www.mhhe.com/Bodie 12e Footnote 7 is reproduced below: 7We pointed out in footnote 4 that Equation 16.3 for modied duration can be written as dP/P = D*dy. Thus, D* = 1/P >

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