怎么理解the one exhibiting the highest level of positive convexity？

问题如下：

For bonds that are otherwise identical, the one exhibiting the highest level of positive convexity is most likely the one that is:

选项：

A.callable. B.option-free. C.putable.

解释：

C is correct. When interest rates rise, a putable bond is more likely to be put back to the issuer by the investor, limiting the loss of value and giving the bond more positive convexity than an option-free bond. In contrast, a callable bond is likely to be called from the investor when interest rates fall, limiting the gain in value and giving the bond negative convexity.

A is incorrect because a callable bond exhibits negative convexity.

B is incorrect because an option-free bond exhibits less positive convexity than a putable bond.

考点：Effective Duration & Effective Convexity

解析：当利率上升时，债券持有人容易行权，将债券提前以约定好的价格卖还给发行人，因此在利率上升的时候会有一个价格下限。由于价格跌不下去，所以putable bond会呈现出more convex的特征。