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. Question 1 [10 points]. 1. [2 points] Name two situations in which a duration hedge could fail. 2. [2 points] Explain why the short-term

. Question 1 [10 points]. 1. [2 points] Name two situations in which a duration hedge could fail. 2. [2 points] Explain why the short-term rate in the CIR model is both mean-reverting and nonnegativ...

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