CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

For a fixed-rate bond, the percentage price change is greater when the market discount rate goes down than when it goes up. This is referred to as the ______.
A. inverse effect
B. convexity effect
C. coupon effect
Explanation: Convexity: as yield increases, the price of a bond declines at a declining rate.

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