Duration question

CFA Level I
#21

If the yields went down than that sucks cuz that was a gimme question and I got it wrong for not paying closer attention.

#22

I reckon there is a little confusion due to parallel discussion of two duration based questions. The answer choices that we are pondering (-8 or 8%) are related to the question WITHOUT reference to convexity.Does anyone remember for sure if the given yield change in the question was stated as positive or negative? Best, DD

#23

I think you guys are talking about 2 separate questions b/c I somewhat remember both. - I remember getting -8% for one of them

#24

floor_filler Wrote: ------------------------------------------------------- > If the yields went down than that sucks cuz that > was a gimme question and I got it wrong for not > paying closer attention. I got it wrong on the test too, only one question out of many- nothing to worry about

#25

nirjraina Wrote: ------------------------------------------------------- > Are we allowed to discuss the answers without > giving away the question? Check out the L2 board. They are discussing questions left and right…

#26

Ya maybe I said too much in here… is it possible to delete / edit posts?

#27

Yes it is. Go to your post and click “edit” then u can delete.

#28

Well I’m happy that atleast people in Level 1 do strive to follow the CFA level code of ethics. Hats off to all and one!

#29

i got -8.

#30

Well I’m happy that atleast people in Level 1 do strive to follow the CFA ethics. Hats off to all and one!

#31

i got -8 as well.

#32

.

#33

dashingdude Wrote: ------------------------------------------------------- > Due to the pledge I will not post the actual > question, but just to get a feel of the answer. > There was a question on bond price change based on > duration. There were few choices but I thought > that the valid once were either 8% or -8%. I > picked up -8%. Do you guys recall and was that > right? > > Thanks, > DD Ans was 8% since it was a decrease in 200basis point with a duration of 4 and since there is already a negative sign in duration the net effect would be a positive sign

#34

Change in Price =-Dur * Change in Yield.

#35

kenanadu Wrote: ------------------------------------------------------- > Change in Price =-Dur * Change in Yield. halfway there, read the rest of the thread and you will find the real equation

#36

i could have sworn it was an increase in rates…hmm

#37

decrease in yield

#38

I took the -8 as well. I remember paying close attention to this question and I believe the yields ROSE by 200 bp.

#39

But what about convexity? I think that if there is a rise in i.r. then price decreases. by duration it should be -8% but the most correct should be less decrease than that, isn’t?

#40

I remember I got -8% and I’m 100% sure I am correct on that one. Yields went up by 200 basis points and had a duration of 4 was the question.