8. A portfolio contains a long position in an option contract on a US Treasury bond. The option exhibits positive convexity across the entire range of potential returns for the underlying bond. This positive convexity:

A. Implies that the option's value increases at a decreasing rate as the option goes further into the money.

B. Makes a long option position a superior investment compared to a long bond position of equivalent duration.

C. Can be effectively hedged by the sale of a negatively convex financial instrument.

D. Implies that the option increases in value as market volatility increases.