Ways of answering essay question

[StraightStreet]

Hi,

An example with this question in the 2015’s AM exam:

Is it necessary to write an explanation on effective duration, convexity, key rate duration like in the guide answer?

Is it the following answer good enough?
Scenario 1: No violation. Optima and its benchmark: same price sensitivity to a small parallel shift in the yield curve because of matching effective duration.
Scenario 2: No violation. Optima and its benchmark: different price sensitivity to a non-parallel shift in the yield curve but key rate duration is not required to match.

Many thanks!

[fino_abama]

@StraightStreet

Is it necessary to write an explanation on effective duration, convexity, key rate duration like in the guide answer?

Don’t need to explain. That’s more like guided learning to explain to candidates on the terms.

[S2000magician]

@StraightStreet

Is it necessary to write an explanation on effective duration, convexity, key rate duration like in the guide answer?

I wrote my Survivor’s Guide to the CFA Institute Command Words with you in mind.