Explain the yield curve shifts

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Reference no: EM133107646

Another limitation concerns a portfolio with assets with varying maturities. The assumption made when using duration as a measure of how the value of a portfolio will change if market yields change is that the yield on all maturities will change by the same number of basis points. The key point is that two portfolios with the same duration may perform quite differently when the yield curve shifts.

Reference no: EM133107646

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