Convexity refers to how much the shape of the curve changes on a graph showing the link between ... a bond or bond fund with a five-year average duration would likely lose approximately 5% of ...

To understand convexity, we need to look at what is meant by bond duration – the average time it takes to receive back ... interest rates can have on the bond’s duration. The below graph demonstrates ...

At its core, convex analysis examines functions whose graph lies below every chord connecting ... relating the function's midpoint value to its average over an interval. Prequasiinvex Function ...

Oscar Wong / Getty Images Duration and convexity are two tools used to manage ... fixed-income investors need ways to measure the average maturity of a bond's promised cash flow, to serve as ...

So the curve is “convex” to bottom of the graph, where the horizontal and ... to diminishing returns (and so is buying too many “average” players), then you’re better off with fewer ...

The arithmetic average and compounded rate can diverge over time. At times, the difference can be greater than the bid-offer spread. So, dealers must calculate a convexity adjustment to keep the rates ...