CONVEXITY is the price change that occurs for a bond not accounted for or predicted by modified dU1"ation. Convexity explains why price change estimates using modified duration increase in error as the yield changes, generally by more than 100 basis points. Bonds with positive (negative) convexity have increased (decreased) duration as interest rates fall (rise). Bonds with positive convexity, such as those with put options, have returns higher than those predicted by duration alone. Mortgage-backed securities and callable bonds generally have negative convexity, which means that the price increase predicted by duration for a steep rate decline is too high.
OMITTED is to leave undone or leave out, i.e. to prevent from being included or considered or accepted.
OPERATING TRANSFER specifically identifies the transfer of resources from one fund/account to another made to support the normal level of operations of the receiving fund/account.
Enter a term, then click the entry you would like to view.