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Question 4 (a) Bond duration must be lower than maturity. Comment. (7 marks) (b) Answer the below questions for bonds A (pay interest semiannually). Coupon

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Question 4 (a) "Bond duration must be lower than maturity." Comment. (7 marks) (b) Answer the below questions for bonds A (pay interest semiannually). Coupon Yield to maturity Maturity (years) Par Price Bond A 12% 10% 2 RM100.00 RM103.545951 (3 marks) (1) Compute the modified duration for Bond A. (4 marks) Compute the convexity measure Bond A

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