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If someone asked you if they should invest in a 5-year Maturity Treasury Zero-Coupon or a 5-year Callable Corporate bond, how would you describe the
If someone asked you if they should invest in a 5-year Maturity Treasury Zero-Coupon or a 5-year Callable Corporate bond, how would you describe the considerations they would need to make before making this investment? In other words, what are the differences between the two in terms of cash flow structures, risk and return. Also, which would have the longer duration, and which would have the higher convexity (and why)?
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