CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

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
Correct Answer: B

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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