CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

What is the interest rate risk, in percentage price change, of a semi-annual-pay 9%, 15-year bond with an 8.5% yield if rates increase by 60 basis points?
A. -4.80%
B. -4.55%
C. 4.80%
Explanation: Current Price = 104.19, Full Valuation = 99.19, % Change = -4.80%

User Contributed Comments 5

User Comment
kalps Surely this is wrong becos 60 basis points is 0.06% as 100bp is 1% - am i wrong or what ??
kalps sorry ignore my last comment it is getting close to the exam and i am going mad !!!
ilic26 where does current price and full valuation come from? can someone help?
danlan First, with N=30, I=4.25, PMT=4.5, and FV=100, we get PV=-104.19

If we change I=4.55, then we get PV=-99.19
mpapwa22 Yap...Danlan is the man. Thts exactly what it is
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