For a given bond,the curvature of the price-yield curve is termed:
A) modified duration.
B) immunisation.
C) sensitivity.
D) convexity.

Question

Quizplus · Accepted Answer

The curvature of the price-yield curve is referred to as convexity. This is the measure of the bond's price sensitivity to changes in interest rates, which reflects how the bond's price changes relative to changes in its yield. Convexity is a vital portfolio management tool since it indicates how a bond's price will change as interest rates shift.

For a Given Bond,the Curvature of the Price-Yield Curve Is