Question
In a flight-to-quality episode, why does empirical duration better capture high-yield bond behavior?
Tap to flip
Answer
It reflects the historical offset from spread widening.
Tap to flip back
Question
Why is key rate duration also called partial duration?
Tap to flip
Answer
It measures sensitivity to one maturity point on the curve.
Tap to flip back
Question
How are analytical duration measures obtained?
Tap to flip
Answer
From mathematical formulas such as Macaulay, modified, or effective duration.
Tap to flip back
Question
Why are a coupon bond's key rate durations spread across multiple maturities?
Tap to flip
Answer
Cash flows occur on coupon dates and at maturity.
Tap to flip back