Convexity Is a Desirable Feature of Bonds Because

Multiple Choice

Convexity is a desirable feature of bonds because.

A) As interest rates decline, the price of a low convexity bond decreases at a decreasing rate.
B) As interest rates decline, the price of a high convexity bond decreases at an increasing rate.
C) As interest rates decline, the price of a low convexity bond increases at a decreasing rate.
D) As interest rates decline, the price of a high convexity bond increases at an increasing rate.
E) As interest rates decline, the price of a high convexity bond decreases at a decreasing rate.