HomeDefinitionsCompareDebt Negative convexityThe financial definition for Negative convexity:A bond characteristic such that the price appreciation will be less than the price depreciation for a large change in yield of a given number of basis points. For example, a fixed-rate mortgage may lose value as rates go down because of prepayments. Similar MatchesConvexityConvexityProperty that a curve is above a straight line connecting two end points. If the curve falls below the straight line, it is called concave. Positive convexityPositive convexityA property of option-free bonds that the price appreciation for a large downward change in interest rates will be greater (in absolute terms) than the price depreciation for the same downward change in interest rates. Click to compare definitions of Negative convexity Click to view definitions beginning ne |