- CFA Exams
- CFA Level I Exam
- Study Session 14. Fixed Income (1)
- Reading 44. Introduction to Fixed-Income Valuation
- Subject 2. Relationships between Bond Price and Bond Characteristics

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**CFA Practice Question**

Positive convexity means that ______

A. bonds prices move inversely with interest rates.

B. the bond price function is curved, opening away from the origin.

C. price changes resulting from equal required yield increases and decreases are of equal magnitude.

**Explanation:**Positive convexity means that the bond price function is curved, opening away from the origin.

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**User Contributed Comments**
4

User |
Comment |
---|---|

iceluke |
is not it A? |

Halabjad |
A is true but doesn't pertain to the ? |

natexchang |
what is the origin? |

joelmats |
the origin is at 0,0 |