CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

If a bond is trading at 96.829 with a yield to maturity of 4.53 percent and duration equal to 5.38, its Price Value of a Basis Point (PVBP) is closest to:
A. 0.0463
B. 0.0482
C. 0.0521
Explanation: The duration multiplied by one basis point (0.0001) multiplied by 100% is the percentage change in value of the bond for a one basis point change in interest rates. PVBP is the price multiplied by the percentage change in value for a one basis point change in interest rates, or 5.38 x 0.0001 x 100% = 0.0538% multiplied by 96.829 = 0.0521.

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