1. Use the following statements to answer questions 1-2. Statement 1: Modified duration is a better measure for a bond’s sensitivity for shaping risk than key rate duration. Statement 2: Effective...

1. Use the following statements to answer questions 1-2.

• Statement 1: Modified duration is a better measure for a bond’s sensitivity for shaping risk than key rate duration.


• Statement 2: Effective duration is a better measure for a bond with an embedded option than modified duration.


• Statement 3: Spread duration is a measure of the risk-free rate change.


• Statement 4: Modified duration is a measure of curve duration.