Bond immunization


does anyone one know how to compute the dollar duration for a liability?

I know that for a bond it’s bond value x effective duration x 0.01.

However, in question 6 of the 2010 mock, they compute the dd of the liability as liability value x number of yrs x 0.01.

what am I missing here?


MV * duration * .01

For a liability with one shot payment, think zero coupon! Then duration = time to maturity in years