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Question 2 To compute the effective duration and convexity of this bond you vary the par rate curve down/up by 40 basis points and compute

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Question 2 To compute the effective duration and convexity of this bond you vary the par rate curve down/up by 40 basis points and compute new prices of 103.314 and 101.677. a. Calculate the effective duration of the callable bond b. Calculate the effective convexity of the callable bond c. In one or two sentences, explain what it means for the convexity to be negative

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