1. Duration and convexity are used in the bond management. Carefully define and explain

   what duration and convexity capture.

2. How many assumptions that underlie Macaulay duration and convexity? Critically explain all

   the assumptions.

3. Calculate the Macaulay duration and convexity of a 5% bond with 2 years and 90 days to maturity. There are 180 days in the current coupon period. The yield is 6.2%.

4. Calculate modified duration and modified convexity as well as dollar duration and dollar

   convexity.