Answer:
convexity = 37.6306
Explanation:
given data:
maturity time = 7 years
yield to maturity (y) = 8% = 0.08
coupon bond = 6%
price= $89.59 ( gotten from the summation of pv(cf) from the table attached below )
t = time
convexity can be found using this formula
[tex]= \frac{1}{p(1+y)^2} * summation of (t +t^2) * pv(cf)[/tex]
= [tex]\frac{1}{89.59*(1.08)^2} * 3932.310[/tex] = 37.6306
