2012 Mock Q 37 & 38,

CFA Level III
#1

Why would one use cash duration 0.25 and the other use cash duration 0?

Is there a rule on what to use?

#2

One is DURATION

the other one is BETA

cash has no beta

#3

OHHHH< I see

Thanks bud,

#4

wait so when would you use the .25 cash duration? If you are adding exposure from funds that were real cash? ie not synthetic cash?

#5

I believe it was given in the question as .25. If not stated assume zero for cash duration

#6

If given, use cash in numerator if you are increasing or decreasing allocation to bonds.