Suppose 10 years from today you are to receive $7,000, and you will continue to...
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Suppose 10 years from today you are to receive $7,000, and you will continue to receive $7,000 annually for each year thereafter, in perpetuity. Given a continously compounded interest rate of 0.9%, what is the convexity of these cash flows? (to the nearest 0.01 years^2) (Hint: Work out a closed form solution, rather than try to calculate numerically.)
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