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Basic Question 11 of 14
Which type of bond has the highest effective duration? Assume other things being equal.
B. callable bond
C. fixed-rate bond
A. zero coupon bond
B. callable bond
C. fixed-rate bond
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Martin Rockenfeldt
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.