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Basic Question 18 of 19
The price movements of option-free bonds are ______.
B. primarily characterized by the inverse relationship between required yield and price and positive convexity
C. primarily characterized by the direct relationship between required yield and price and negative convexity
A. primarily characterized by the inverse relationship between required yield and price and negative convexity
B. primarily characterized by the inverse relationship between required yield and price and positive convexity
C. primarily characterized by the direct relationship between required yield and price and negative convexity
User Contributed Comments 2
| User | Comment |
|---|---|
| johntan1979 | Negative convexity only applies to mortgage bonds and callable bonds at low yields (likely to be called). |
| Olesya_CFA | Thanks johntan1979 |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
identify the relationships among a bond's price, coupon rate, maturity, and yield-to-maturity
CFA® 2025 Level I Curriculum, Volume 4, Module 6.