It says maturity effect is least likely to hold for a low-coupon, long-term bond trading at a discount.
I looked up maturity effect in CFAI text and searched on the internet, but I couldn’t find a clear definition of maturity effect.
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A bit of googling tells me that the maturiy effect is basically: The longer the maturity of the bond, the greater the price volatility of the bond.
This holds for low coupon bonds, and low yields, but not for high yields. This is because at high yield, a change in interest rates would be less significant (i just picture the convexity graph to explain the reasoning for this, basically, lower elasticility at high yields).
And since a bond trading at discount would have high yields, it’s unlikely that it would experience much price voolatility despite the long term and low coupon.
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