CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

Which statement is TRUE?
A. Modified duration and effective duration on a traditional (option-free) fixed-rate bond are always equal.
B. A floater will always sell at par on each rate reset date, as its rate is adjusted based on changes in reference rate.
C. Neither of them is true.
Explanation: A. The bond's sensitivity to the benchmark yield curve can differ from its sensitivity to its own yield-to-maturity.

B. The required margin may not remain the same.

User Contributed Comments 1

User Comment
dbalakos This is all about credit risk vs interest rate risk
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