Q 5, the answer gives 0.75 multiplied by 9, but why not by 12 and then the statement will be correct as it states? Is it an error?
You need to be more specific with what question you’re referring to
This question is worded in a very confusing manor. I Just took that Fixed Income Topic Test #7-Tugela and read the paragraph multiple times for question 5 and couldn’t figure out if it was saying that the USD duration was 9 or 12 before you calculate the Duration Contribution in ZAR.
Anyone else have this issue or a way to understand what that paragraph is trying to say more clearly?
It’s a weird question yeah. The case appears to be setting the ZAR as the domestic investor and the USD as the foreign bond in the first part of the sentence, but then flips at the end of the sentence and is giving the duration of a ZAR denominated bond, presumably taking the perspective of a USD domestic investor. The answer is definitely looking at it from a USD domestic ZAR foreign perspective.
Lets hope the exam is worded more clearly! Definitely confusing when it swaps the sentence structure like that.
The question tricked u with weird wording. I also got tricked. The real exam wont use these petty tricks, so dont worry as long as you understand the concept.