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When yield rises, the bond price will drop, and the change can be estimated with duration. But when convexity is considered, things are not as
When yield rises, the bond price will drop, and the change can be estimated with duration. But when convexity is considered, things are not as bad; convexity is good news. How about the opposite case when yield drops? From a bond investor's point, is convexity good news or bad? Use a chart to do your analysis and explain how convexity affects a bond holder when the yield drops. You must define the two axes.
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