Is this something to do with the fact we are calculating absolute % change in bond price on pg.292, and then a return impact on pg.149. Therefore we are using slightly different convexity equations…?

WOuld be good to know the answer to this…I’m reading chapter 42 right now.

Okay I think I have it now. In chapter 42, the formula covers modified duration (option free bond) whereas in chapter 47, the formula pertains to effective duration (bond with an option). That must be the difference in formulas

There’s actually no difference in the formulas, it’s just that you have to use apples to apples with what type of duration you are using. I think Level I explained it better than Level II.