- 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
Which type of bonds may have negative convexity?
B. callable bonds
C. putable bonds
A. traditional option free bonds
B. callable bonds
C. putable bonds
Correct Answer: B
This is, in fact, just what investors need if they are constructing an estimate that falls within a region of positive convexity, as may be the case with callable bonds.
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