Explanation

For an option-free bond, convexity has the following effects:

• For a decrease in yield: The convexity adjustment increases the magnitude of the bond price change (makes the price increase more than what duration alone would predict)
• For an increase in yield: The convexity adjustment decreases the magnitude of the bond price change (makes the price decrease less than what duration alone would predict)

This is because convexity measures the curvature of the price-yield relationship. Positive convexity means that as yields decrease, bond prices increase at an increasing rate, and as yields increase, bond prices decrease at a decreasing rate.

Therefore, the correct answer is:

• Decrease in Yield: Increase in magnitude
• Increase in Yield: Decrease in magnitude

This corresponds to Option A.