when x% rate increase, apply convexity to adjust the bond price, do we need to divide by 2 or not. thanks.
in the numerator V(-)+V(+)-2V(0) in the denominator divide by 2V(0)*delta(y)^2
We on Level I ?
not the formula of the convexity, but the formula when apply it: is it : convexity * delta(y)^2 or it is convexity/2 * deltay(y)^2? thanks. barthezz Wrote: ------------------------------------------------------- > in the numerator V(-)+V(+)-2V(0) > > in the denominator divide by 2V(0)*delta(y)^2