标题: Question 104 Schweser Mock PM [打印本页]

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作者: cmacedo    时间: 2011-7-11 18:23     标题: Question 104 Schweser Mock PM

Hi Guys
I don't have access to the schweser errata for the mock exam, I am writing this on my bb.
How can the answer be C?
Which pair of features will be MOST LIKELY to increase a bonds duration compared to an otherwise identical bond?
A. Lower rating and coupn
B. Higher YTM, longer maturity
C. Higher Liquidity, and higher rating

Thanks

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作者: ajpheif16    时间: 2011-7-11 18:23

Duration = Interest Rate Sensitivity

Lower Rating / Coupon = Higher Interest Rate (low duration)

Longer Maturity - will increase duration ; Higher YTM - will decrease duration

Higher Liquidity / Rating = Low Interest Rate (Thus more "sensitive" to changes & high duration)

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smileyface is gonna clear the CFA L2 Exam on 5th June, 2011. And making this statement won't be a violation of Code of Ethics since its a fact. ;-)



Edited 1 time(s). Last edit at Wednesday, June 2, 2010 at 09:56AM by smileyface.

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