35) A three-year bond with a yield of 13% (continuously compounded) pays a 5% coupon at the end of each year. The face value of the bond is $100. What is the bond's convexity? 8.07 8.31 8.45 8.88 36) Duration measures: Measures the sensitivity of percentage changes in the bond's price to changes in its yield The time it takes to recover half the present value of all future cash flows from the bond Neither A, nor B Both A and B 37) Banks are exposed to liquidity funding risk because: They transform liquid deposits liabilities) to illiquid loans (assets) They have problems meeting their depositors' demands to withdraw money from their accounts They are unable to borrow from the lender of last resort, the central bank A, B and C are all true