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Property that a curve is above a straight line connecting two end points. If the curve falls below the straight line, it is called concave.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Describing a curve segment whose ends fall above an arbitrarily set straight line. Convex properties are important to charting; for example, when tracking a stock market's performance, a rise in the chart with respect to the previous day's close followed by a correction going down to but not necessarily meeting that close may be described as a convex curve. See also: Concave.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
A mathematical measure of the sensitivity of a bond's price to changing interest rates. A high convexity indicates a greater responsiveness of a bond's price to interest rate changes.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.