General Studies · Bond Valuation
According to Malkiel's Bond Value Theorems, for a given change in yield, the percentage price change is asymmetrical; specifically, a decrease in yields leads to a larger percentage increase in price than the percentage decrease in price resulting from an equal increase in yields. Which of the following concepts best explains this asymmetrical price response?
- 1Coupon Reinvestment Risk
- 2Yield to Maturity
- 3Bond Convexity✓
- 4Bond Duration
Correct answer
Bond Convexity
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