CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

A portfolio consists of two bonds:

Bond | Maturity | Coupon | Duration | Proportion in Portfolio
Bond A | 10 years | 8% | 6.7 | 60%
Bond B | 7 years | 5.2% | 3.9 | 40%

Which of the following is the best measure of portfolio duration?

A. 3.71
B. 5.3
C. 5.58
Correct Answer: C

Portfolio Duration = wA DA + wB DB = 0.6*6.7 + 0.4 * 3.9 = 5.58

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