Yield curve and effect on portfolio

[MrSmart]

@johntavv

@IHateMyLIFO

jmaldonado is right. As the answer stated, it has nothing to do with convexity or duration, it’s basically just a trade to pick up more yield in an improving economy. If you have to make assumptioins for a question, then you’re probably going about it the wrong way.

I get that the improving economy means we can pick up yield since the BB+ that we bought will increase in value. But question stated that there is also an upward shift in yield, so the BB+ that we bought will decrease in price more than the BBB- that was sold, hence overall negative effect. Or is this question focussed only on the yield and not price?

The question got it wrong. I removed it from my score.