Find the convexity of portfolio consisting of instruments

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Find the convexity of a portfolio consisting of the following instruments, assuming the effective rate of interest is 8%:

(a) A million dollars investment in a 10-year zero coupon bond.

(b) A million dollar investment in a $1000 par value 3-year bond with 10% annual coupons.

(c) Two million dollars invested in preferred stock paying level dividends at the rate of 6% into perpetuity

Reference no: EM131599723

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