Exam CFA-Level-I Topic 1 Question 1015 Discussion

Actual exam question for CFA's CFA-Level-I exam
Question #: 1015
Topic #: 1
A bond is currently trading at 98.5 per 100 par, thus yielding 6.21%. It is estimated that the bond price will be 99.4 if rates decreased by 25 basis points and 97.8 if rates increased by 25 basis points. What is this bond's effective convexity?

Suggested Answer: C Vote an answer

Convexity = (P- + P+ - 2 P0) / (2 P0 (*r)2) = 162.

by Meroy at Apr 15, 2025, 05:21 AM

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