- CFA Exams
- CFA Exam: Level I 2021
- Study Session 15. Fixed Income (2)
- Reading 46. Understanding Fixed-Income Risk and Return
- Subject 5. Money Duration of a Bond and the Price Value of a Basis Point

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**CFA Practice Question**

The PVBP of a 10%, 20-year bond selling for 132.0326 to yield 7% would be closest to ______.

B. -0.1316

C. 0.1316

A. -1.326

B. -0.1316

C. 0.1316

Correct Answer: C

+.0001 Price = 131.901086, -.0001 Price = 132.1642, PVBP = (132.1642 - 131.9011)/2 = 0.1316

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**User Contributed Comments**
7

User |
Comment |
---|---|

AndyBear |
Can we get a negative PVBP? |

panvino |
No, it is absolute value |

Dragonrana |
How did they get 131.901086 on the calculator? |

dipu617 |
I/Y= 7.01/2 = 3.505 N=20*2 = 40 PMT = 10/2 = 5 FV= 100 [CPT] PV= -131.901087 |

johntan1979 |
If you don't round, $0.132179 |

tomalot |
Thanks John, any chance you give your answers to ten decimal places? |

tafa |
I don't know if it is normal not to mention that the bond is semi-annual?would be expected in the exam to guess such thing or rather deduce it? |