Use the following statements to answer questions 1-2.

• Statement 1: Modified duration is a better measure for a bonds 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.

Which statement is correct?

	A.	Statement 1
	B.	Statement 2
	C.	Both statement 1 and 2
	D.	Neither statement