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Convexity If exists, use the definition 2 . 1 1 and to show that for a convex function ( for a concave function Formula 2
Convexity
If exists, use the definition and
to show that for a convex function for a concave function Formula
For a bond with periodic coupon payments, the th cash flow is discounted using Show that is a convex function of
Show that Formula for the price of a coupon bond is a convex function of yield. Hint: Use the result from part b of this problem.
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