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- Topic: Positive and negative convexity
| Author | Topic: Positive and negative convexity |
|---|---|
| dexus @2007-11-01 05:08:48 |
Hi there, I was just wondering what positive and negative convexity means in respect to bonds. Can anyone help ? |
| ThaProfessa @2007-11-14 15:23:00 |
Convexity is the change in a bonds price above or beyond what the duration says the change should be. A bond that has positive convexity will decrease less for the same increase in rates as a regular bond and increase more for the same decrease in rates and vice versa for negative convexity. |
CFA Discussion Topic: Positive and negative convexity
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