Convexity is a second-order measure of a bond’s expected price performance.  The chart below shows the durations of two different bonds.  One is a fixed-cash-flow bond (such as a ...

Convexity measures the relationship between bond prices and bond yields, which shows how a bond’s duration changes with interest rates.

Graph algorithms constitute a fundamental area of computational research that focuses on the analysis and manipulation of graph structures, which represent systems of interconnected entities. In ...

The below graph demonstrates the relationship between bond duration and convexity. The bond’s duration is represented by the straight line plotted between ‘interest rates’ and ‘bond prices’. In ...

The calculator at DQYDJ will provide numeric data and a graph comparing the convexity of a bond against its ... This bond would have a duration of 2.29 years and convexity of 2.56 , ...

The below graph demonstrates the relationship between bond duration and convexity. The bond’s duration is represented by the straight line plotted between ‘interest rates’ and ‘bond prices’. In ...

Therefore, the convexity is low with short duration (see Exhibit 2). As interest rates rise, the floater coupon payments increase, reducing the bond’s price sensitivity to rate changes.

To take on convexity, we need to first grasp what’s known as duration. As interest rates drop, bond prices will rise and vice versa. The extent of the move is typically larger for bonds with a ...