Complete the following definitions: a) Duration is defined as the point in time when the stream...
Complete the following definitions:
a) Duration is defined as the point in time when the stream of bond payments is equal to:________ .
b) Duration is also defined as a measure of price________ (Hint: a word used in economics classes)
c) Convexity measures the degree of __________ of the price-yield function.
Homework Answers
A) price of the Bond (Bcz duration is the weighted average number of years an investor must maintain a position in the bond until the present value of the bond's cash flows equals the amount paid for the bond.
B) Sensitivity
C) Non linear relationship
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Complete the following definitions: a) Duration is defined as the point in time when the stream...
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