Contrast the effective durations of straight, callable and putable bonds

An option-free bond's effective duration changes little with rates. A callable bond's effective duration is never higher than the straight bond's: when rates fall and the call moves into the money, the bond behaves like a shorter bond maturing at the call date, so its duration drops. A putable bond's effective duration is also never higher than the straight bond's: when rates rise and the put moves into the money, the bond behaves like a bond maturing at the put date. When options are far out of the money, all three have similar durations. Which of the two option bonds has the lower duration depends on how close each option is to exercise.