the question give annual yield is 8% without stating whether it's semi-annual/annual/continous compounded,
solution use it as being semi-annual compounded without starting any assumption, since the bond price, the convexity formula used will be quite different is assume yield with different compound frequency, am I missing anything? or as long as i state the assumption then solve the question accordingly will be fine ?
solution use it as being semi-annual compounded without starting any assumption, since the bond price, the convexity formula used will be quite different is assume yield with different compound frequency, am I missing anything? or as long as i state the assumption then solve the question accordingly will be fine ?
2000 Q14 Duration Convexity question
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