Answer 10 says that $duration is $45 million. Is that not a bit too much? I think it should divide it by 100(see page A-22). Elsewhere in the reading it does. please help.
Maybe they imagine you have x 100 leverage;) Of course it should be divided by 100, there are many mistakes in the curriculum concerning duration I believe (e.g. example 10 in reading 29 or example on p. 340 in reading 27). The old book written by Fabozzi was rewritten by other guys and we have version beta of the readings I am afraid.
you’re both correct that it should be divided by 100 EXCEPT for overlooking that the CFAI texts did divide by 100 in their solution. dollar duration = duration * market price divided by 100. in this case (#10 A- 23): duration = 4.53 and market value = 10,000,000*100.40625/100 100.40625/100 = 1.004625 so replacing MV with this we get a dollar duration of just above $45mln. Dominiko, you seem to have it out for duration in the last few days