Convexity

You only live twice - Once when you are born… and once when you look death in the face. - Ian Fleming

Bonds are investment securities where an investor lends money to a company or a government for a set period of time, in exchange for regular interest payments. Once the bond reaches maturity, the bond issuer returns the investor’s money. Fixed income is a term often used to describe bonds, since your investment earns fixed payments over the life of the bond. - Forbes Advisor

The history of the British national debt can be traced back to the reign of William III, who engaged a syndicate of City traders and merchants to offer for sale an issue of government debt, which evolved into The Bank of England. - WikiPedia DARPA / CIA / OSS Construt

B L O G.  U N D E R.  C O N S T R U C T I O N.

Linear Thinking > Perceptions evolved to Systems Thinking upon the study of Fixed Income Instruments during the year 2000 in Phoenix, Arizona.

The Series 7 - General Securities Representative Exam crystallizes the dominant focus of debt in our economic systems today.

Not the Arbiter of the Truth - No Political Drama > Simple Observations of Current Macro

Convexity is the change in a bond’s price that is not accounted for by duration.

Duration alone can accurately estimate price changes for a bond resulting from relatively small changes in rates (<50 basis points). The bigger the change in rates and the longer the change takes, the less accurate duration becomes.