PVD of Cash Flows easier, shorter, finding, present

king_kong

Does anyone have a shorter and easier way to explain Present Value of Distributions of Cash Flows?

I am finding it hard to explain and present.

Chuckrox

Not sure how short you're looking for, but here is what I have in my notes:

PVD
-Measures proportion of index's total duration attributable to cash flows falling within selected periods
-Describes how total duration is distributed across maturity
-If manager can mimic PVD, portfolio will have same sensitivities as benchmark

Once you know all that, the actual steps taken are pretty intuitive.