Calculate the Convexity (Measured in Six-Monthly Periods)for a Coupon-Paying Bond $1.85$

question 5

Multiple Choice

Calculate the convexity (measured in six-monthly periods) for a coupon-paying bond maturing in two years,where the bond has a face value of $100 000,yield of 5% p.a.and coupon rate of 7% p.a.Assume interest rates are paid half yearly and the last coupon payment has just been made.

• A) \( 1.85 \)
• B) \( 3.66 \)
• C) \( 9.35 \)
• D) \( 10.26 \)

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