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2a. What relationship is shown by the yield curve? Mention how financial market participants may use the yield curve (no description is necessary). (2.5 points)

2a. What relationship is shown by the yield curve? Mention how financial market participants may use the yield curve (no description is necessary). (2.5 points)

2b. You have a choice of investing in two identical bonds: C and N. These two bonds are identical except C is convertible and N is non- convertible. In general, witch bond will provide you higher yield? Why?

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