With the help of the following diagram, describe is the relationship between the price of...

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Finance

With the help of the following diagram, describe is the relationship between the price of a bond and interest rate changes in the market. Explain the convexity effect?image

Price Y-Y 1 = Y 2-Y (equal basis point change) P1-P>P-P2 P1 PS P2 P2 Y1 Y Y2 Yield

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