Question 4b
Marking Guide
Duration as a single measure of sensitivity of interest rates 3–4
Explanation of convexity 2–3
Explanation of the change in the shape of the yield curve and other limitations 2–3
Max marks 8
Duration as a single measure of sensitivity of interest rates 3–4
Explanation of convexity 2–3
Explanation of the change in the shape of the yield curve and other limitations 2–3
Max marks 8