Note: a single payment of R after one year. Find the convexity of a mortgage with annual installments which is prepaid at the end of one year. The effective rate of interest is 8% on the mortgage. 8....

Question

Question

Find the convexity of a mortgage with annual installments which is prepaid at the end of one year. The effective rate of inte

Note: a single payment of R after one year.

Answer 1

Answer #1

The convexity of mortgage which has annual payments and gets repaid on 1 year is equal to=1^2+1=2

Answer 2

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