Describe how bond convexity affects the theoretical linear price-yield relationship of bonds. What are the implications of bond convexity for estimating changes in bond prices?

Describe how bond convexity affects the theoretical linear price-yield relationship of bonds. What are the implications of bond convexity for estimating changes in bond prices?
Ans: It is very important to understand the concept of convexity to know its affect of it on the linear price-yield relationship of bonds. It is actually a way to determine the price of bonds to change in interest rate. So, bond convexity affects the theoretical linear price-yield relationship of bonds because if the bonds have higher convexity then, it is considered that they will eventually provide a better market investment in the market. High bond convexity even helps to access that the interest rates will rise in the future. Hence, overall, it definitely affects the theoretical linear price-yield relationship of bonds and if the lower convexity is found then, in that case, rates are likely to remain unchanged or they can even fall than the actual rate.
It becomes easy for one to take a decision if the bond convexity method is...