- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 46. Understanding Fixed-Income Risk and Return
- Subject 7. Interest Rate Risk and the Investment Horizon
CFA Practice Question
The key assumption when calculating effective duration and effective convexity is ______
B. there is a parallel yield curve shift.
C. there is a term structure of yield curve.
A. the yield curve is sloping upwards.
B. there is a parallel yield curve shift.
C. there is a term structure of yield curve.
Correct Answer: B
The key assumption is that all yields-to-maturity rise or fall by the same amount across the curve.
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