Convex
Bowed, as in the shape of a curve. Usually referring to the price/required yield relationship for option-free bonds. |
Similar financial terms
Positive convexityA property of option-free bonds whereby the price appreciation for a large upward change in interest rates will be greater (in absolute terms) than the price depreciation for the same downward change in interest rates.
Negative convexity
A bond characteristic such that the price appreciation will be less than the price depreciation for a large change in yield of a given number of basis points.
