- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 11. Yield-Based Bond Duration Measures and Properties
- Subject 2. Money Duration and Price Value of a Basis Point
CFA Practice Question
A fixed-income portfolio manager owns a $5 million par value non-callable bond. The bond's duration is 5.6 and the current market value is $5,125,000. The dollar duration of the bond is closest to ______.
B. $287,000
C. $700,000
A. $280,000
B. $287,000
C. $700,000
Correct Answer: B
A bond's dollar duration is the expected price change given a 100 basis point change in yield. In this case, dollar duration = 5.6 x 0.01 x $5,125,000 = $287,000
User Contributed Comments 3
| User | Comment |
|---|---|
| tomalot | For anyone that's interested, the answer is also $287,000.0000000000 |
| GBolt93 | You definitely rounded that last 0 |
| sshetty2 | yep. Forgot a zero. please go back to notes |