CFA Practice Question

There are 147 practice questions for this study session.

CFA Practice Question

In the binomial interest rate tree, assume i0 = 3%, i1, L is 2.5%, and the volatility of the one year rate is 15%. The one standard deviation of the one-year rate is:
A. 37.5 bps
B. 43.7 bps
C. 45 bps
Explanation: i0 x σ = 0.03 x 0.15 = 0.45% or 45 bps.

User Contributed Comments 2

User Comment
darbyland anyone on this?
sumeetb Curriculum pg 85
You need to log in first to add your comment.