- 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
The PVBP of a 10%, 20-year bond selling for 132.0326 to yield 7% would be closest to ______.
B. -0.1316
C. 0.1316
A. -1.326
B. -0.1316
C. 0.1316
Correct Answer: C
+.0001 Price = 131.901086, -.0001 Price = 132.1642, PVBP = (132.1642 - 131.9011)/2 = 0.1316
User Contributed Comments 7
| User | Comment |
|---|---|
| AndyBear | Can we get a negative PVBP? |
| panvino | No, it is absolute value |
| Dragonrana | How did they get 131.901086 on the calculator? |
| dipu617 | I/Y= 7.01/2 = 3.505 N=20*2 = 40 PMT = 10/2 = 5 FV= 100 [CPT] PV= -131.901087 |
| johntan1979 | If you don't round, $0.132179 |
| tomalot | Thanks John, any chance you give your answers to ten decimal places? |
| tafa | I don't know if it is normal not to mention that the bond is semi-annual?would be expected in the exam to guess such thing or rather deduce it? |