Fixed Income Q100

100Analyst 1: The interest rate risk is the sensitivity of a bond to parallel shifts of the yield curve. The yield curve risk is a bond’s sensitivity to changes in the shape of the yield curve.
Analyst 2: The yield curve risk is the sensitivity of a bond to parallel shifts of the yield curve. The interest rate risk is a bond’s sensitivity to changes in the shape of the yield curve.
Which analyst’s statement is most likely correct?

Option : A
Explanation : The interest rate risk is the sensitivity of a bond to parallel shifts of the yield curve. The yield curve risk is a bond’s sensitivity to changes in the shape of the yield curve.

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