Question: Please answer completely and correctly! 1. (a) Define the measure of Bond Duration and sketch how it is derived. (b) Show how you can use

Please answer completely and correctly!

Please answer completely and correctly! 1. (a) Define the measure of Bond

1. (a) Define the measure of Bond Duration and sketch how it is derived. (b) Show how you can use Duration to measure the impact of changes on interest rates on a Bank's equity. (c) Explain the limitations of the Duration measure. (d) Provide a real world example of potential losses of interest rate. Hint: GTB pages 108114. 1. (a) Define the measure of Bond Duration and sketch how it is derived. (b) Show how you can use Duration to measure the impact of changes on interest rates on a Bank's equity. (c) Explain the limitations of the Duration measure. (d) Provide a real world example of potential losses of interest rate. Hint: GTB pages 108114

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