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Consider a cash flow of payments C₁, C2,..., Cn at the end of years t₁, t2,..., tn. Suppose the nominal interest rate is r = 0.04 and that interest is compounded monthly. Tick all those statements that are correct. O a. The convexity is the same as the duration squared in this case. 300 b. The effective duration is equal to 301 times the duration in this case. O c. The effective duration is equal to 25 times the duration in this case. Od. The duration and the effective duration are the same for this example. 0 e. If all the above cash payments are the same then the effective duration is equal to the duration.

Consider a cash flow of payments C₁, C2,..., Cn at the end of years t₁, t2,..., tn. Suppose the nominal interest rate is r = 0.04 and that interest is compounded monthly. Tick all those statements that are correct. O a. The convexity is the same as the duration squared in this case. 300 b. The effective duration is equal to 301 times the duration in this case. O c. The effective duration is equal to 25 times the duration in this case. Od. The duration and the effective duration are the same for this example. 0 e. If all the above cash payments are the same then the effective duration is equal to the duration.

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Consider a cash flow of payments C₁, C₂, ..., Cn at the end of years t₁, t2, ..., tn. Suppose the nominal interest rate is r = 0.04 and that interest is compounded monthly. Tick all those statements that are correct. O a. The convexity is the same as the duration squared in this case. 300 O b. The effective duration is equal to 301 times the duration in this case. The effective duration is equal to 25 times the duration in this case. 26 Od. The duration and the effective duration are the same for this example. O e. If all the above cash payments are the same then the effective duration is equal to the duration. O c.
Transcribed Image Text:Consider a cash flow of payments C₁, C₂, ..., Cn at the end of years t₁, t2, ..., tn. Suppose the nominal interest rate is r = 0.04 and that interest is compounded monthly. Tick all those statements that are correct. O a. The convexity is the same as the duration squared in this case. 300 O b. The effective duration is equal to 301 times the duration in this case. The effective duration is equal to 25 times the duration in this case. 26 Od. The duration and the effective duration are the same for this example. O e. If all the above cash payments are the same then the effective duration is equal to the duration. O c.
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