CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

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

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

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?
You need to log in first to add your comment.