CFA Practice Question

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CFA Practice Question

A 2%, 30-year bond is being valued at a 4% flat yield curve with 20% interest rate volatility. The bond is callable in 10 years. Which key rate duration is the highest for this bond?
A. 2-year
B. 10-year
C. 30-year
Explanation: The callable bond is unlikely to be called and thus it behaves more like a 30-year option-free bond.

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