Answer: 2-year rate will affect the 20-year rate

## Explanation Key rate exposures assume that rate changes affect adjacent rates but not distant rates. In a key rate framework: - The 2-year rate affects rates from 0 to 5 years - The 5-year rate affects rates from 2 to 7 years - The 7-year rate affects rates from 5 to 20 years - The 20-year rate affects rates from 7 to 30 years The assumption that the 2-year rate will affect the 20-year rate is NOT part of the key rate framework. Key rate exposures assume that rate changes only affect nearby maturities, not distant ones.

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