Pilot paper Q4

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May 18, 2010 at 7:40 pm #43972
dongbula
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Pilot paper Q4:
New yield on debt:
ten year syndicated loan 500millions remains 3 years left:
risk free rate+spread
:).45%+0.44%:).89%
why 0.44% being uesd? I thought should be: 0.44%x0.6+0.75%x0.4=0.564%

Thank you!
May 20, 2010 at 11:54 am #60566
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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