Fixed Income question

aroranidhi2004
Finance Junkie
Posts: 41
Joined: Thu Oct 16, 2014 4:51 pm

Fixed Income question

Postby aroranidhi2004 » Fri Nov 07, 2014 4:21 am

Which of the following is most likely to be the money duration of newly issued 360-day eurocommercial paper?


A) 360 days.

B) 4.3%.

C) 25 million.

edupristine
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Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Fixed Income question

Postby edupristine » Fri Nov 07, 2014 7:18 am

Please mention the exact source of this question. Also, do mention the answer and let me know what part of the answer you haven't understood.

aroranidhi2004
Finance Junkie
Posts: 41
Joined: Thu Oct 16, 2014 4:51 pm

Fixed Income question

Postby aroranidhi2004 » Sat Nov 08, 2014 3:39 am

Hi

I got this question from schwerser pro. I am not being able to recollect the answer right now. I was not being able to get the question, as how i can calculate money duration with the information available.

Regards,
Nidhi

edupristine
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Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Fixed Income question

Postby edupristine » Sat Nov 08, 2014 5:36 am

Money Duration is basically the measure of price change in currency terms rather than percentage terms.

Money Duration = Modified Duration * Price

Now here, some information seems to be missing from the question.


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