another fixed income.. free, measures, another, income, doesnt

prav_Cfa7

compared to option free bond a callable bond has more
interest rate risk? reinvestment risk?
i said no yes…since IR risk measures duration and callable has lower duration i.e when rates rise callable doesnt fall AS MUCH as option free
concur??

Siddimaula

i think no yes

homie

I put No yes

needhelp1700

I picked Yes, Yes…. it has lower duration cause it has positive convexity, but in essence positive convexity at low yield is more interest rate risk (ie. price doesn’t go up when interest rate drop)?
This is not the case?

HuskyGrad2010

price doesn’t go up when interest rate drop – This means less sensitive not more.