Do I need to memorize MacDur for level 1?

It it important to memorize this? Or is it not crucial to do so?

Any calculator shortcuts?


Calculate NPV using the bond’s YTM as the discount rate, and these cash flows:

  • CF1 = coupon
  • CF2 = 2 × coupon
  • CF2 = 3 × coupon
  • CFn−1 = (n − 1) × coupon
  • CFn = n × (coupon + par)

Thanks a ton!

My pleasure.

Magician is a personal hero of mine. But in all fairness I respectfully beg to differ when somebody advocates memorisation even if it is coming from the legend himself.

No you don’t need to memorise. You should internalise. You won’t have to remember ever…

I meant it in the sense that you need to know the formula, but you are correct: it’s important that you understand the formula, not merely memorize it.

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