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The assumption is the bond yield remains the same. I calculated the yield for the bond; then i applied it with the new coupons…and get 110….point something . Let me know if it makes sense or no
Hi eshon5, about q1 bond new value has to be higher than current value 107.8 correct? When the yield increases the bond price / value descreases…but here it is the coupons which increased to 5.57 and when coupons go up also the price goes up…correct me if i aM wrong as i find this assumpion also in several interest web site. I get 110.something for new bond value.Anyway p4 always hard. I did the 2 25mark questions ok but simply half of the first 50 marks. Really do not know what it happens if, for example, you get 40 in the 2 optional questions and 10/15 in the compulsory…someone has an idea?
Question 1 too long…full of meaninglesss details. Time pressure..
..i got 46 in june…i think i did worse in september :)) never give upthanks a lot. i simply made a mistake…nevermind…50 points really hard to get. it was my 1st try…from monday evening i am starting to study again. anyway i find it difficult to understand sometimes the bbp study book. not all is understandable 100%
i was a bit confused as i perfectly know how to calculate the basis in a int rate future. but as it was written to ignore the basis risk..it means future equal spot at month end…so i decided not to calculate the basis risk. maybe i am wrong..
another point is that…as i am working…time to study properly remainsat nights and in the weekends..hard!
hi all. as usual hard paper p4. no way.
the point is that the study text and practise book do not cover enough everything..that s the point. we need to dig in youtube for extra lessona exercises comments..
one question..in q2 or q4 do not remember it was written:DO IGNORE BASIS RISK..what does it mean?
