A Bond That Has Positive Convexity

question 24

Multiple Choice

A bond that has positive convexity:

• A)is more price sensitive when rates fall then when rates rise.
• B)is more price sensitive when rates rise then when rates fall.
• C)has a negative duration.
• D)has a duration greater than maturity.
• E)a.and d.

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Definitions:

Refractory Period

The period immediately following a stimulus or action during which a nerve or muscle is unresponsive to further stimulation.

Neuron

A specialized cell transmitting nerve impulses; a nerve cell, the fundamental unit of the nervous system encoding and transferring information.

Myelin Sheath

A protective covering that surrounds axons of many neurons, facilitating the faster transmission of electrical impulses along the nerve cells.

Dendrites

Extensions of neurons that receive signals from other neurons and transmit them toward the cell body.