Pilot paper Q4

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    dongbula
    Member
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    Pilot paper Q4:
    New yield on debt:
    ten year syndicated loan 500millions remains 3 years left:
    risk free rate+spread
    =3.45%+0.44%=3.89%
    why 0.44% being uesd? I thought should be: 0.44%x0.6+0.75%x0.4=0.564%

    Thank you!


    Profile photo of John Moffat
    John Moffat
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    You are correct. The examiners answer is very poor and very confusing.
    Try and get hold of a copy of the answer in BPP’s Revision Kit (it is question 9 in there) – they have done what you write and it is much more sensible.

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