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5. The following information about bonds A, B, C, and D are given. Assume that bond prices admit no arbitrage opportunities. What is the convexity

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5. The following information about bonds A, B, C, and D are given. Assume that bond prices admit no arbitrage opportunities. What is the convexity of Bond D? Price Bond A Cash Flow at the end of Year 1 Year 2 Year 3 100 0 0 91 B 86 0 100 0 0 0 100 78 ? D 5 5 105 5. The following information about bonds A, B, C, and D are given. Assume that bond prices admit no arbitrage opportunities. What is the convexity of Bond D? Price Bond A Cash Flow at the end of Year 1 Year 2 Year 3 100 0 0 91 B 86 0 100 0 0 0 100 78 ? D 5 5 105

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