Is this question still relevant? I don’t recall doing any practice questions of this nature in the EOC readings or coming across these type of questions.
Thank you
is this on immunization? I think it’s likely that it will come up…
Yes sorry, should have been more specific.
Was on immunization using 3 different bonds, and to find which was most appropriate.
Hated that question…
yes. dollar duration quesion.
But I don’t understand why there is BEY in the question…
Why…
Why BEY you are here…
Why…
Why BEY is here. I’m really afraid of BEY EAR BEY EAR…
BEY = divide by 2
EAR= 1 + square root
Solved
My issue with this question is the duration. Don’t we typically assume that the duration is 3/4 of the years? That would make the duration 3, not 4, and then my dollar duration calculation doesn’t add up. Can someone advise here?
It’s zero-coupon bond