Mar 152015
 

Convexity is the second derivative of changes in the price of a bond for changes in its yield to maturity. It measures changes in modified duration as yields change. Any financial product which has discount factors in it will exhibit convexity (e.g. Swaps, FRA’s, Bonds). See Modified Duration

More on banking and finance terms tomorrow, so please come back for more on what the meaning is of words like Convexity.

Example of Convexity in use?

Can you provide an example of ‘Convexity’? If so you could win 100 GBP of Amazon vouchers. Please comment below and one person will be selected at random on [date]. Thank-you

 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

(required)

(required)