Question: A $ 5 , 0 0 0 6 % three - year bond has semiannual coupons and redemption amount $ 5 , 2 6 5

A $5,0006% three-year bond has semiannual coupons and redemption amount $5,265. It is purchased to provide the investor with a 4% annual effective yield. Find the Macaulay convexity C(4%,\infty ) and compute the modified convexity
C(4%,2).

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