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Part3: Bond Convexity Measures Convexity is the measurement of "price curvature" of a bond "in the neighborhood" of the bond's current market rate and price point: Convexity=2V0(y)2V+V+2V0 whereyYY0Y+=0.50%=Y0y=currentmarketrateofbond=Y0+ycorrespondindtoV=priceofbond@YcorrespondingtoV0=currentpriceofbondcorrespondingtoV+=priceofbond@Y+ correspondind to V - = price of bond @ Y - corresponding to V0= current price of bond corresponding to V+=price of bond @ Y+ Thus the measurement is based on "neighborhood" bond prices of V - and V+ which corresponds to change in neighborhood yields -- Y00.5% - i.e. Y - and Y+ from its current bond market rate Y0. Convex Funds, a bond investment company, underwrote a set of bonds with the following characteristics: Using the above formula and data, calculate this bond's Convexity by calculating and filling in the template: fill in thase. calculate these bond prices PS: leave thom in positive numbers. Use above formula to calculate in space bolow Convexity=$345.4550$7.2800 Part3: Bond Convexity Measures Convexity is the measurement of "price curvature" of a bond "in the neighborhood" of the bond's current market rate and price point: Convexity=2V0(y)2V+V+2V0 whereyYY0Y+=0.50%=Y0y=currentmarketrateofbond=Y0+ycorrespondindtoV=priceofbond@YcorrespondingtoV0=currentpriceofbondcorrespondingtoV+=priceofbond@Y+ correspondind to V - = price of bond @ Y - corresponding to V0= current price of bond corresponding to V+=price of bond @ Y+ Thus the measurement is based on "neighborhood" bond prices of V - and V+ which corresponds to change in neighborhood yields -- Y00.5% - i.e. Y - and Y+ from its current bond market rate Y0. Convex Funds, a bond investment company, underwrote a set of bonds with the following characteristics: Using the above formula and data, calculate this bond's Convexity by calculating and filling in the template: fill in thase. calculate these bond prices PS: leave thom in positive numbers. Use above formula to calculate in space bolow Convexity=$345.4550$7.2800