Bond Convexity Refers the Property of Bonds That Causes Prices

question 70

Multiple Choice

Bond convexity refers the property of bonds that causes prices

• A) to rise and fall in a way that exactly offsets changes in yield to maturity.
• B) rise and fall in a linear manner as yields change.
• C) rise at a decreasing rate when yields fall.
• D) rise at an increasing rate when yields fall.

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Definitions:

Future Value

The value of an investment or sum of money projected at a future date, taking into account factors like interest rates or returns.

Economic Forces

Factors that influence the direction of an economy, including supply and demand, inflation, and employment levels.

Non-Renewable Resources

Natural resources that cannot be replenished once used, such as fossil fuels and minerals.

Renewable Resources

Natural resources that can be replenished over time, such as solar energy, wind power, and biomass, contributing to sustainable environmental practices.