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hard · Certified Financial Planner General Principles

The Hartwell household is reviewing a bond portfolio. If interest rates are expected to fall significantly, the planner explains that the actual price increase of the bonds will likely be higher than what a linear duration estimate predicts.

Which concept explains this phenomenon?

  1. Yield to Call
  2. Duration Gap
  3. Bond Convexity
  4. Macaulay Duration

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