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Calculate the requested measures in parts (a) through (d) for bonds A and B (assume...

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Finance

Calculate the requested measures in parts (a) through (d) for bonds A and B (assume that each bond pays interest semiannually)

Bond A

Bond B

Coupon

8%

9%

Yield to maturity

8%

8%

Maturity (years)

2

5

Par

$100.00

$100.00

Price

$100.00

$104.055

a) Compute the convexity measure for both bonds A and B

b) An investor bought one share of bond A and one share of bond B. What is the Macaulay duration of the investors bond portfolio? Explain the answers

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