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Q1: The price risk premium reflects the amount that is required to compensate investors for the higher price risk of holding longer-term securities because: Longer-term
Q1: The price risk premium reflects the amount that is required to compensate investors for the higher price risk of holding longer-term securities because:
- Longer-term securities are more expensive
- Longer-term securities have greater convexity
- Longer-term securities have smaller cash flows
- Longer-term securities have higher duration
- Longer-term securities are less liquid
Q2: Other things being equal, the convexity premium:
- Increases with the maturity
- Decreases with maturity
- Remains constant as maturity increases
- Has no identifiable relationship with maturity
using the following sheet kindly answer the below questions?
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