What Is Aurora Military Bond's Convexity?
• Aurora Military Housing Bond’s convexity is 83.11; a bond with greater convexity is less affected by interest rates than a bond with less convexity. bonds with greater convexity will have a higher price than bonds with a lower convexity, regardless of whether interest rates rise or fall.
• Aurora Military Housing has positive convexity. Because the duration rises as the yield declines. A bond with positive convexity will have larger price increases due to a decline in yields than price declines due to an increase in yields. Positive convexity can be thought of as working in the investor’s favor, since the price becomes less sensitive when yields rise (prices down) than when yields decline (prices up).
• Aurora Military Housing has positive convexity. Because the duration rises as the yield declines. A bond with positive convexity will have larger price increases due to a decline in yields than price declines due to an increase in yields. Positive convexity can be thought of as working in the investor’s favor, since the price becomes less sensitive when yields rise (prices down) than when yields decline (prices up).