- CFA Exams
- CFA Level I Exam
- Study Session 12. Fixed Income (1)
- Reading 32. The Term Structure and Interest Rate Dynamics
- Subject 7. Yield Curve Factor Models

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**CFA Practice Question**

Which factor is most likely the change in the yield curve curvature?

A. Factor 1

B. Factor 2

C. Factor 3

**Explanation:**A unitary positive standard deviation change in this factor leads to positive yield changes at both short and long maturities but produces declines at intermediate maturities. It seems to be changes in the curvature or twist in the yield curve.

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