(Answered) Which of the following statements is correctr egarding the

Finance

Which of the following statements is correctr egarding the effects of interest rate shift on fixed-income portfolios with similar durations?

A. A barbell portfolio has greater convexity than a bullet portfolio because convexity increases linearly with maturity.

B. A barbell portfolio has greater convexity than a bullet portfolio because convexity increases with the square of maturity.

C. A barbell portfolio has lower convexity than a bullet portfolio because convexity increases linearly with maturity.

D. A barbell portfolio has lower convexity than a bullet portfolio because convexity increases with the square of maturity.

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