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Dollar convexity is the second order derivative of the bond pricing function with respect to the yield to maturity. Since derivation is a linear operator,

Dollar convexity is the second order derivative of the bond pricing function with respect to the yield to maturity. Since derivation is a linear operator, the convexity of a portfolio of bonds is the weighted average of the convexity of the bonds in the portfolio, and the weights are the relative prices of the bonds in the portfolio.

A. TRUE

B. FALSE

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