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4) Use continuous compounding to calculate the dirty price of a 9% coupon bond that pays coupons semi-annually, has a face value of 100 and

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4) Use continuous compounding to calculate the dirty price of a 9% coupon bond that pays coupons semi-annually, has a face value of 100 and has a maturity of two years. The term structure of interest rates is flat at 5%. Hence, calculate the bond's duration and convexity. (20 marks)

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