CFA Practice Question

There are 252 practice questions for this study session.

CFA Practice Question

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:

A. 3-Year
B. 10-Year
C. Duration cannot be a negative number.
Correct Answer: A

Negative durations are sometimes possible for maturity points shorter than the maturity of the bond if the bond has a very low coupon.

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