- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 6. Fixed-Income Bond Valuation: Prices and Yields
- Subject 1. Bond Pricing and the Time Value of Money
CFA Practice Question
What is the estimated new price of a semi-annual-pay 9%, 15-year bond with an 8.5% yield if rates decrease by 25 basis points?
B. 104.19
C. 106.39
A. 58.76
B. 104.19
C. 106.39
Correct Answer: C
New Price = 106.39. PMT=4.5, FV=100, N=30, I/YR=8.25/2=4.125
User Contributed Comments 8
| User | Comment |
|---|---|
| sivenkova | Why 8,25? In the task it is stated as 8,5? Is it a mistake? |
| alki | yield decreases 25 bps to 8.25 |
| Oarona | Thanks Alki. Good observation |
| jonan203 | dude, this question is like one sentence long and you missed "rates decrease 25 basis points"? |
| praj24 | how did you know.... FV = 100? |
| ocshing | praj24 I just tried with par value of 1000 and I get PV=1063.87..you can't simply go wrong whether you have chosen FV=100 or 1000 |
| ascruggs92 | praj24, please, for your own good, read the notes. |
| khalifa92 | guys always read slowly and try to understand the question properly because trying to solve fast and move on |