Which of the following statements is (are) true with respect to the usage of the various forms of duration and convexity measures?
I). Holding everything constant, Modified duration will always be higher than Macaulay duration.
II). Both modified duration and Macaulay duration assume that the cash flows from a bond will not be affected by changes in interest rates.
III). If interest rates are low enough, effective duration and modified duration will yield the same results for a callable bond.
IV). When there is increasing likelihood that the issuer will call the bonds, effective convexity should be used as opposed to modified convexity.