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Basic Question 0 of 27
Consider a 10-year, 2% annual coupon, option-free bond. Assume a 4% flat yield curve. One key-rate duration calculated by an analyst is -0.13. This is MOST LIKELY to be the key rate duration of:
B. 10-Year
C. Duration cannot be a negative number.
A. 3-Year
B. 10-Year
C. Duration cannot be a negative number.
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Learning Outcome Statements
calculate and interpret effective duration of a callable or putable bond;
compare effective durations of callable, putable, and straight bonds;
describe the use of one-sided durations and key rate durations to evaluate the interest rate sensitivity of bonds with embedded options;
CFA® 2025 Level II Curriculum, Volume 4, Module 28.