This topic is not covered in Schweser Reading 64, p. 89. Anyone, who has taken Level 1 exam/who is going to take Level 1, knows this would be tested in the exam? The LOS only states COmpute the value of a zero coupon bond. Whether it is required to value a bond between coupon PMT is not explicitly stated. But this is marked optional material. What do you reckon?
Birku0969 only the concepts covered by LOS will be tested and even in LOS we have command words like Analyze appraise arrange describe combine compute calculate etc And as long as optional reading is concerned so it say’s in CFAI texts, first pages “Keep in mind that optional material is provided strictly for your convenience and will not be tested.You should rely on the required segments and the reading-specific LOS in preparing for your examination”
Agree with supersunny. I dont have the material with me. But going by post’s heading “VALUING A BOND BTW COUPON PMT”, you need to know the concept of “Full Price” and “Clean Price”. If I can remember correctly, there was a question on this in Jun’09 CFA Exam.
Supersunny138 - thanks for your reply. THere is a typo error in my original message. No wonder you think “the answer is so obvious, what a stupid question”. What I meant is that the topic is not marked as optional material in CFA. That’s why I wanted to find out whether this will be in the exam, given that it was not mentioned at all in the Schweser reading 64. Rus1bus - Thanks for your advice. You are spot on. This topic covers the calculation of accrued interest, full price and clean price. As Schweser did not include this in their LOS, it makes me wonder whether I need to know how to calculate accrued interest and clean price for the sake of the exam. Like I said earlier in the original message, the LOS only states “Compute the value of a zero coupon bond”. These calculations are only relevant for a coupon paying bond, not zero coupon bond. WHy would I bother with the calculation? Anyway, due to this, I am reassessing the reliability of Schweser and I am definitely considering other study aids when I take Level II. Any recommendations?
bikru0969, Schweser worked for me in L1. For L2, I still plan to take Schweser and will see how it goes. btw, Schweser did cover Full Price and Clean Price in their material for Jun 2009. I dont know how abridged was that because I did not compare it with CFAI text. But I guess, it was enough for me to solve the question in exam. Good Luck.
welcome bikru0969 !