AppliedMultiple choice
A plain fixed-coupon bond has positive convexity. What does that mean for a bp move in yields?
- AThe price moves the same amount whether yields rise or fall, since duration is symmetric
- BThe price falls by more when yields rise than it gains when they fall
- CThe price rises more when yields fall than it drops when yields rise
- DThe price is unaffected by yield changes until the bond is close to maturity
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