Many analysts refer convexity as more precise version of-02222
This subjective question is related to the book/course
vu mth001 Elementary Mathematics.
It can also be found in
vu mth001 Mid Term Solved Past Paper No. 1.
Question 1: Many analysts refer convexity as more precise version of duration. Do you agree with this statement?
Answer:
Yes I agree because Bond convexity is a bit of a perplexing topic for many. Some refer to convexity as the degree of curvature that exists in the price to yield relationship while others refer to convexity as the second derivative, or a more precise version of duration, which would be added to duration to get that much more precise.
