- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 46. Understanding Fixed-Income Risk and Return
- Subject 6. Bond Convexity
CFA Practice Question
Refer to the following convex price-yield curve.
Increasing the yield-to-maturity will cause the price to drop by ______.
A. B
B. C
C. B - C
Explanation: B is the estimated price drop due to duration and C is the estimated price increase due to convexity. B - C is the total impact.
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