Fixed Income: durations and convexity

Question

Hi Everyone!I'm not even sure how important this is...but does anyone have any tips for remembering all of the different duration and convexity equations? I feel like I'm internally hyperventilating when I see one ._.Thank!

Pranav · Answer

@simply_complex2‌1. have you tried writing them down on paper and reading them daily? if you write the formulas separately as notes, they will certainly be engrained in your mind :smiley: 2. solving questions based on duration and convexity periodically?the two solutions above should definitely help...

PaulAdaptPrep · Answer

@simply_complex2‌ I'd recommend you first understand conceptually the differences and what implications they have. Then working practice problems will drill home the differences.Our Fixed Income video lessons are available free on Youtube. Here's the playlist for the ones covering duration and convexity:http://youtu.be/RKs-QY5a-SQ?list=PLJnX_Qm2u8ejGu99qRve2Qe7duov47Oj3We also sell exam prep for the actuarial exams, which are very equation heavy. For the FM exam you get 3 hours to answer 35 questions. We've found that for most people, working practice problems is far more effective for memorizing equations than techniques like flashcards. Our Adapt Exam Engine is the gold standard for practice for actuaries. You can find conversations online about Adapt, like this one on Reddit:http://www.reddit.com/r/actuary/comments/2j1ibe/fm_exam_october_2014_sitting_thread/If you sign up for a free 7 day full trial (no credit card required) you can work as many practice problems as you want in our Adapt Exam Engine for the CFA Level I. Click "Start Quiz" and select "8.55 Understanding Fixed-Income Risk and Return" and do a quiz of 10+ questions. Keeping working them until you no longer hyperventilate :smile: Sign up at: https://www.passedtense.com/