In an excel spreadsheet represent a price-yield curve for two different coupon bonds. The first coupon bond, bond A, has a maturity of 2 years, coupon rate 10% and face value 1000 Eur. The second coupon bond, bond B, has a maturity of 6 years, coupon rate 10% and face value 1000 Eur. The third coupon bond, bond C, has a maturity of 10 years, coupon rate 10% and face value 1000 Eur Please answer the following questions, by using the example of the aforementioned coupon bonds:

a) What can you say about the duration and convexity of the coupon bonds A, B and C? b) Estimate convexity for coupon bonds A, B and C at the 12% and 24% discount rate! c) What is the relationship between the maturity and convexity of a coupon bond? d) How is the coupon rate related to the convexity of the same coupon bond? e) How do zero-coupon bonds compare to coupon bonds as regards the convexity?