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Basic Question 0 of 4
Which type of bond has the highest effective duration? Assume other things being equal.
B. callable bond
C. fixed-rate bond
A. zero coupon bond
B. callable bond
C. fixed-rate bond
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
explain why effective duration and effective convexity are the most appropriate measures of interest rate risk for bonds with embedded options
calculate the percentage price change of a bond for a specified change in benchmark yield, given the bond's effective duration and convexity
CFA® 2026 Level I Curriculum, Volume 4, Module 13.