Soln Ch 15 FI Mgt - Texas Christian University

The percentage gain predicted by the duration-with-convexity rule is: Predicted % gaingain. Coupon bond. Actual % gaingain. The percentage gain predicted by the duration-with-convexity rule is: Predicted % gain gain. c. The 6% coupon bond, which has higher convexity, outperforms the zero regardless of whether rates rise or fall. ................
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