- CFA Exams
- 2021 Level I
- Study Session 15. Fixed Income (2)
- Reading 46. Understanding Fixed-Income Risk and Return

### Seeing is believing!

Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.

##### Learning Outcome Statements PDF Download

1. Sources of Returna. calculate and interpret the sources of return from investing in a fixed-rate bond; | |

2. Macaulay, Modified and Effective Durationsb. define, calculate, and interpret Macaulay, modified, and effective durations;c. explain why effective duration is the most appropriate measure of interest rate risk for bonds with embedded options;
| |

3. Properties of Bond Duratione. explain how a bond's maturity, coupon, and yield level affect its interest rate risk; | |

4. Bond Portfolio Durationf. calculate the duration of a portfolio and explain the limitations of portfolio duration; | |

5. Money Duration of a Bond and the Price Value of a Basis Pointg. calculate and interpret the money duration of a bond and price value of a basis point (PVBP); | |

6. Bond Convexityh. calculate and interpret approximate convexity and distinguish between approximate and effective convexity;
| |

7. Interest Rate Risk and the Investment Horizonj. describe how the term structure of yield volatility affects the interest rate risk of a bond;
| |

8. Credit and Liquidity Riskl. explain how changes in credit spread and liquidity affect yield-to-maturity of a bond and how duration and convexity can be used to estimate the price effect of the changes. |

You have a wonderful website and definitely should take some credit for your members' outstanding grades.