Question: lease mark the only INCORRECT statement about the relationship between Bond Prices Pb and Yield to Maturity (YTM): a. Convexity is the rate of chage

lease mark the only INCORRECT statement about the relationship between Bond Prices Pb and Yield to Maturity (YTM): a. Convexity is the rate of chage of the slope of the price-yield curve expressed as a fraction of the price of the bond b. When a bond is trading at a discount (premium), then the price of the bond will rise (decline) to face value when it reaches maturity c. Convexity of a bond explains why the size of the drop in the price of the bond will be higher if the yield rises +100bp than when the increase in the price if the yield declines -100bps d. Bond traders like convexity because if they are long a bond, they will make more money if the yield falls by -100 bps than what they will lose if yields rise by +100bps

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