CFA CFA Level 1 CFA Level 1 Question of the Week – Fixed Income

CFA Level 1 Question of the Week – Fixed Income

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    • Avatar of Matt_AnalystPrepMatt_AnalystPrep
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        ::

        The correct answer
        is A.

        Price Change = (-Duration * Yield
        change) + (0.5 * Convexity * Yield change2))

        Price change = (-8 *
        0.0025) + (0.5 * 20 * 0.00252) = -1.99% 

        The bond’s value
        will fall by approximately 1.990% * 200,000 = $3,988.

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