CFA CFA Level 3 Schweser Exam 2PM Q33 – Explanation

Schweser Exam 2PM Q33 – Explanation

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      @vincentt @RaviVooda

      Given portfolio effective duration = 5.42 and spread duration = 6.25.

      Schweser stated that for 50bps change in the zero volatility spread should lead to 6.25 / 2 = 3.125% change in portfolio value.

      Why is 6.25 divided by 2? Is this the same as 0.5% x 6.25 = 3.125%?

      Can’t find the formula anywhere, just want to make sure I am not confused. Thanks!

    • Avatar of RaviVoodaRaviVooda
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        Yes @alta12 it is the same.

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