- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 12. Yield-Based Bond Convexity and Portfolio Properties
- Subject 1. Bond Convexity and Convexity Adjustment
CFA Practice Question
Refer to the following price-yield curve.
B. D
C. A + D
Reducing the yield-to-maturity will cause the price to rise by ______.
A. A
B. D
C. A + D
Correct Answer: C
A is the estimated price increase due to duration, and D is the estimated price increase due to convexity.
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