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Basic Question 1 of 3
If the effective duration of portfolio A is the same as that of portfolio B, the performance of the two portfolios ______ for a small ______ shift in the spot rates.
II. may be the same, parallel
III. may not be the same, nonparallel
I. may not be the same, parallel
II. may be the same, parallel
III. may not be the same, nonparallel
User Contributed Comments 2
| User | Comment |
|---|---|
| ryanpetty | The key rate duration allows for changes in the level, slope and shape of the yield curve. |
| davidt87 | i get the point, but the logic is all screwed in this question. if they "may" be the same, it stands to reason that they may also not be the same |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
define key rate duration and describe its use to measure price sensitivity of fixed-income instruments to benchmark yield curve changes
CFA® 2025 Level I Curriculum, Volume 4, Module 13.