High Convexity for low coupon

[Anonymous]

Dear all

If I read Question 137 of exam I, I am confused about question 137. For me answer IV is true and therefore correct. If I read the solution it states that it is incorrect. Could you help me on this?

Regards,

Question 137:
Which of the following statements are true?

IV. Convexity is higher for a bond with a lower coupon when compared to a similar bond with a higher coupon.

Therefore Convexity is higher for a bond with a lower coupon when compared to a similar bond with a higher coupon. Statement IV is not correct.

[Author]

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