Explanation:

Key rate duration measures the sensitivity of a bond's price to changes in specific key rates along the yield curve. When there is a parallel shift in the benchmark yield curve (meaning all rates change by the same amount), the sum of key rate durations equals the bond's effective duration.

Key Points:

1. Effective duration measures price sensitivity to parallel shifts in the yield curve.
2. Key rate durations decompose interest rate risk across different maturities on the yield curve.
3. For parallel shifts, the combined effect of all key rate durations equals the effective duration.
4. Modified duration assumes a flat yield curve and parallel shifts, but it's based on the bond's yield to maturity rather than the benchmark curve.
5. Macaulay duration is a weighted average time to receive cash flows, not a direct measure of interest rate sensitivity.

Therefore, for parallel shifts in the benchmark yield curve, key rate durations collectively indicate the same interest rate sensitivity as effective duration.