Question: Q1(a) Critically discuss and explain whether duration is a good approximation for the change in bond prices if interest rates change. (12 marks) (b) Discuss

Q1(a) Critically discuss and explain whether duration is a good approximation for the change in bond prices if interest rates change. (12 marks)

(b) Discuss and explain whether convexity is a desirable trait to bond investors.(8 marks)

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