How do I know whether to use key rate duration or spread duration?

Use key rate duration when the question changes one point or segment of the benchmark yield curve. For example, if the 10-year benchmark yield rises while the 2-year yield is unchanged, key rate duration isolates the price sensitivity to that maturity point.

Use spread duration when the question changes the bond's spread over the benchmark curve. A corporate bond can be affected by both Treasury-rate movement and credit-spread movement. Key rate duration tracks the curve location. Spread duration tracks the compensation investors require above the benchmark.