CFA Practice Question

CFA Practice Question

Which of the following is incorrect?
A. An option-free bond has positive convexity over the entire range of yields.
B. Revenue Bonds have lower yields compared to GO (General Obligation) bonds.
C. An callable bond has negative convexity over some entire range of low yields.
Explanation: General Obligation bonds are backed by entire municipal revenues rather than revenues from specific projects, so are less risky and consequently have lower yields.

User Contributed Comments 0

You need to log in first to add your comment.