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What is meant by the convexity of a bond

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Question 1: Please explain what is meant by the convexity of a bond. Please explain the reason for this occurrence. Draw a graph that exhibits the example of convexity as it applies to bonds. Why is it important to estimate the second derivative of a security when there is a large change in interest rates?

Question 2: Please explain the open market operations of the Federal Reserve recently. How will this effect bond yields and stock prices?

Reference no: EM133074028

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