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Basic Question 18 of 19

The price movements of option-free bonds are ______.

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
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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

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.