___ is the tendency for bond prices to change asymmetrically relative to yield changes.

Question

Quizplus · Accepted Answer

Convexity is the tendency for bond prices to change asymmetrically relative to yield changes. When interest rates move up or down, bond prices do not move in a straight line, but rather in a curve. The curve is typically more pronounced for longer-term bonds and those with lower coupon rates. This means that if interest rates rise, bond prices will fall by a greater amount than they would increase if rates fell by the same amount.

___ Is the Tendency for Bond Prices to Change Asymmetrically