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undefined Assume no default risk. Changes in interest rates will cause immediate changes in bond prices. We use duration or a combination of duration and

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Assume no default risk. Changes in interest rates will cause immediate changes in bond prices. We use duration or a combination of duration and convexity to approximate the bond price changes. Why is the duration an approximation of the real price change? Why is the combination of duration and convexity can do a better job than duration alone? Your explanation should begin with the right formula and explain two scenarios of an increasing or decreasing interest rate separately

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