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NEW QUESTION: 1
A. Option E
B. Option B
C. Option A
D. Option D
E. Option C
Answer: A
NEW QUESTION: 2
Which of the following statements is a correct description of the phrase present value of a basis point?
A. It refers to the present value impact of 1 basis point move in an interest rate on a fixed income security
B. It is the principal component representation of the duration of a bond
C. It refers to the discounted present value of 1/100th of 1% of a future cash flow
D. It is another name for duration
Answer: A
Explanation:
Explanation
This is a trick question, no great science to it. Remember that the 'present value of a basis point' refers to PV01, which is the same as BPV (basis point value) referred to in the PRMIA handbook. In other textbooks, the same term is also variously called 'DV01' (dollar value of a basis point). Remember these other terms too.
PV01, or the present value of a basis point, is the change in the value of a bond (or other fixed income security) from a 1 basis point change in the yield. PV01 is calculated as (Price * Modified Duration/10,000).
NEW QUESTION: 3
Eight cyclists participate in a race L, M, N, O, P, Q, R, S. At the end of every lap, an accurate record was
made of the position of the cyclists, from first (position 1) to last (position 8).
For each of the records the following statements are true:
No two cyclists occupy the same position.
L is in some position ahead of S.
There is exactly one cyclist between M and Q, regardless of whether M or Q is ahead of the other.
N is in the position immediately ahead of R.
Both O and R are in positions ahead of L.
P is in first position.
Which of the following could be noted on one of the records as the positions of the cyclists from position 1
through position 8?
A. P,N,R,S,O,M,L,Q
B. P,N,R,O,L,M,S,Q
C. P,O,L,N,R,M,S,Q
D. P,N,R,L,M,O,S,Q
E. P,N,L,R,O,M,S,Q
Answer: B
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