dd of cash

in 2011 morning exam fixed income question, the month end DD is less than begining value, so it asks for more cash to rebalance to old dollar duration, but cash duration is zero, how can add cash increase dollar duration? thanks, it should add more bond to add DD, isn’t it?

they are not adding cash.

They are using cash to buy more bonds … they are using cash for rebalancing.

for example, if begining DD is 5, ending DD is 3, you mean we need 2 dollar to buy more bond, this 2 dollar is dollar safety margin or cushion spread?

I do not know what to say - except to ask you to go back to basics and read the book again.

sorry - do not have the time

after checking the curicum, rebalance nothing to do with dollar safety margin

Linping. Thank you for taking this test. Thank you.