Examples in the CFA books, or examples by a different test prep provider?
Vol 3 page 151 in the CFA books says FEY.
Found this in the errata: “Stocks exhibit modest positive correlation with inflation in the long run.”
I’m assuming long run inflation is the target inflation and whenever inflation is equal or below target, is a positive for equities, but less so for companies not able to pass on inflation to companies.
Positive butterfly: short and long rates go up; mid rates come down (a smile, less convex curvature)
negative butterfly: short and long rates go down, mid rates go up (a frown, more convex curvature)
Barbell benefits from - butterfly, + twist, - shift
-to compute for implementation shortfall in bps
-computing the effective interest of a floating rate note
For evaluating δ hedging in options, setting benchmark for next day with continuous compounded rate, make sure to use decimal instead:
assume rc = 4%
hence benchmark = value of port e^(0.04/365) —not 4/365
^ what in seven hells?
i believe that question stipulated specifically looking at the current earnings yield or perhaps it was over that past 12 months and thus actual was used.