wrongsaidfred
Member
Hi David,
In the video, you give a nice, simple formula for convexity. I leaned a slightly different formula:
sum of ci*t(t+1)/(1+y)^(t+2) divided by the bond's price. Are these two formulas comparable at all? Is this just the formula we would use if given yield to maturity instead of the term structure of interest rates?
On a side note, is the YTM of a bond usually given to us on a continuous basis or discrete basis?
Thanks,
Mike
In the video, you give a nice, simple formula for convexity. I leaned a slightly different formula:
sum of ci*t(t+1)/(1+y)^(t+2) divided by the bond's price. Are these two formulas comparable at all? Is this just the formula we would use if given yield to maturity instead of the term structure of interest rates?
On a side note, is the YTM of a bond usually given to us on a continuous basis or discrete basis?
Thanks,
Mike
