CFA Practice Question

There are 266 practice questions for this study session.

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 ______.

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
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