Question: Kindly answer with fullsteps in typing not in writing for clearly to read QUESTION 4 (25 MARKS) The following information is given: (Hint: Assume that

Kindly answer with fullsteps in typing not in writing for clearly to read

QUESTION 4 (25 MARKS) The following information is given: (Hint: Assume that each bond pays interest annually) (a) Compute the Macaulay durations for the two bonds. (10 marks) (b) Compute the modified duration for the two bonds. (4 marks) (c) Analyse the approximate duration formula for bonds A and B if yields change by 20 basis points. (6 marks) (d) Compute the convexity measure for both bonds A and B. (5 marks) QUESTION 4 (25 MARKS) The following information is given: (Hint: Assume that each bond pays interest annually) (a) Compute the Macaulay durations for the two bonds. (10 marks) (b) Compute the modified duration for the two bonds. (4 marks) (c) Analyse the approximate duration formula for bonds A and B if yields change by 20 basis points. (6 marks) (d) Compute the convexity measure for both bonds A and B

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