________ is an important characteristic of the relationship between bond prices and yields.
A) Convexity
B) Concavity
C) Complexity
D) Linearity

Question

Quizplus · Accepted Answer

Convexity is the degree to which the relationship between bond prices and yields is curved. This means that the relationship is not linear, so small changes in yields can lead to larger changes in prices. Convexity is important for bond investors because it can help them manage interest rate risk and maximize returns.

________ Is an Important Characteristic of the Relationship Between Bond