BaseballRedhawks
New member
- Jun 18, 2026
- 0
- 0
Question 50……. its one of those basic questions that you adjust the fixed income weights to a portoflio.
You want to Decrease the weight so you need to sell futures.
In the first part of the fomrula, its the new Target duration - 0 / Future duration.
I’ve always seen it as 0, since you are lowering your allocation. However, in this question, they use the Effective Duration (cash equivalents and any hedged positions) = 0.25. WTF? i’ve never seen any question do this before, and they dont give you an explanation. I calculated the answer using 0, and it was one of the multiple choice options…….
Thanks!
You want to Decrease the weight so you need to sell futures.
In the first part of the fomrula, its the new Target duration - 0 / Future duration.
I’ve always seen it as 0, since you are lowering your allocation. However, in this question, they use the Effective Duration (cash equivalents and any hedged positions) = 0.25. WTF? i’ve never seen any question do this before, and they dont give you an explanation. I calculated the answer using 0, and it was one of the multiple choice options…….
Thanks!