Hi, I was attempting to do CFAI problem # 4 on page 362. The calculation for dollar duration is = -D * Value of the port * .01 ( if nothing is give ) I tried to calculate the DD for the portfolio for table 1 -initial values and got 53,669 instaed of CFAI’s answer of 54,212 HELP please
1,060,531.00 5.909 62,666.78 981,686.00 3.691 36,234.03 1,090,797.00 5.843 63,735.27 162,636.08 162,636.08 / 3 = 54,212 check your rounding
why divide by 3 at the end? Isn’t it already weighted by portfolio values?
To calculate the Dollar Duration of a portfolio you need to calculate each individual bond’s dollar duration and add them up. AFTER 1 YEAR: Bond#1: 5.177 x .01 x $1,042,043 = $53,946 Bond#2: 2.817 x .01 x $980,461 = $27,617 Bond#3: 5.125 x .01 x $1,068,319 = $54,751 Portfolio DD = $136,314 The same calculation for INITIAL YEAR is $162,636… Check the Errata issued by CFAI.
Hi, My calculations : 1,060,531.00 *5.909 = 62,666.78 981,686.00 * 3.691= 36,234.03 1,090,797.00 *5.843 = 63,735.27 and then 62666.77* .3333 = 20886.83 36234*.3333 = 12076.79 63735*.3333= 21242.87 Totals up 54206 Is this ok-rounding maybe
I also have problem understanding problem 9 and 10 on page 365. What the q is asking ???
#9 is straight forward…just plug/chuck into your financial calculator. FV = $99.50 PV = $100.40625 PMT = 100 x 0.04125 / 2 N = 1 It should yield 1.15%. I believe that’s how I entered it into my calculator but not 100% sure. I do know I got it on the first try using the financial functions. As for #10, I too had problems with that question… and understood the solution though. Not sure this helps. PJStyles
It helps more than you know. Thanks for your responses.