Yields and Prices 100 ( # ) Define the following yield concepts Redemption yield Par yield Yield call . Yield to worst (b ) Can a zero and an otherwise identical, maturity-matched level-coupon bond ever have the same duration (c ) A 3M T - bill currently sells for 98 :08 ( what does this quotation mean ? ) . Calculate its bond equivalent yield ( d ) Calculate the discount yield of the preceding 3M T - bill currently selling for 98 : 08 (e ) What does convexity measure and how is it used in the assessment of interest rate risk? 100 + 20 2 . Term Structure of Interest Rates. Working as a quantitative analyst for a major W all- Street firm , u are preparing your daily recommendation for relative value trades for your desk and their clients. As befits a junior analyst , you focus on the short end of the yield curve. Type Maturity Coupon Price Spot Yield Disc Factor Fwd Rate UST Bill 182D 39.9650 UST P - Strip 1Y 99.9000 UST Note 1.5Y 2.30 100.0152 UST Note 3.80 100.1403 ( # ) Using current UST security information from Bloomberg reproduced above you first extract the relevant spot rates and fill in the remainder of the table to verify the numbers displayed by your trading system . Note that the maturities are exactly , all securities are on - the - run and the prices midpoint You might want to provide the requisite form ulae indicating your exact calculations to convince your boss that your analysis can be trusted ( b ) Next , you analyze a selection of UST notes to detect any mispricing and possible relative value trades . From Bloom berg, you identify the following prom ising candidates on O c- tober 15 , 2021 : Type Maturity Coupon Actual Price YTM Fair Price Fair Y TM USN L.OY 2.375 102 - 09 0.0729-19 USN 1.5Y 1.500 102 - 0 0.100885 USN 0.500 100 - 2 0.148887