I can’t understand the calculations for implied forward yield.

For example, 2 year forward yield should be 1.01912 = 1.015 × (1+r). This comes to 2.32 vs 2.31 in curriculum. Not a big deal.

For 3 year, 1.02233 = 1.01912 × (1+r). This comes to 2.873 vs 2.85 in curriculum.

What am I doing wrong? Is my interpretation or calculation wrong?

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Here is the image of exhibit 16 from CFA curriculum:

https://imgur.com/WDUAmmE

Bump

It may be rounding carrying on from one to the next.

CP

Ok, but at least the calculations looks correct??? It also gets bigger with time.

For example, for a 6 year maturity, (1.02956)/(1.02745) = 4% vs 3.46% in the curriculum.

54 bps difference is huge.

I don’t see this in the errata and I don’t have enough confidence in my FI to assume that I’m correct in my calculations. Could somebody please confirm?

try using 2 decimal places

1.0295 is 2.95%…it is 2 decimal places.

I’m not worried about the numbers. I just want to make sure that the calculations that I’m doing are correct. Of course, in Fixed income, 54 bps is huge, but again, just want to know if the way I’m thinking of the problem is actually the right way to do it or not.

Can someone please confirm if my calculation is correct?

For example, for a 6 year maturity, (1.02956)/(1.02745) = 4% vs 3.46% in the curriculum.

https://imgur.com/WDUAmmE

I’m trying to calculate the implied forward yield for the 6th year

Anyone?

Got it, thanks