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Ah ok! I think I get it now. It just 2 different ways to display a distribution of data. The top is the PDF and the PPF is basically the CDF with the axes transposed.

If I understand what are you saying, in the inverse distribution the 1.645 represents 95% and less. And in the probability density function the 1.645 represents 95% only?

What is the difference between probability density function and inverse cumulative distribution function, if any? They both look the same

On page 88, we have the following info: -Semi-annual payments -12% coupon -10% interest rate, flat term structure -Next coupon in 122 days -Last coupon paid 60 days ago -Total coupon period = 182 days=122+60 All we are doing is discounting the next $6 coupon to the time since the last coupon...

Hi @Nicole Manley Do you know about the spreadsheet I mentioned above? I did not see it in the Topic 4 bundle

Also, it seems like you need to know the hedge amounts in order to calculate an alternate hedge. Why is that?

After attempting to reconstruct the table in Tuckman using Excel, I think the key rate hedging process can be boiled down to the following steps: 1. Find KR01 for all your current positions, including existing hedges 2. Sum all KR01s for all product, by each key rate to determine current...

To get to $109.43, you can use the TVM calculations on your calculator. However, since coupons are paid semi-annually you need to make sure: -If time to maturity is expressed in years, multiply by 2 (N=5) -Enter yield divided by 2 (2%) -Enter coupon divided by 2 ($4 per $100 par value)...

Hi Nicole, Unfortunately I couldn't find the spreadsheet related to multi-factor hedging, which is referenced as "T4.Tuckman.5Multi-factor" in the video

Would you say they are more 1 or 2 step type calculation similar to CFA L1 or more intensive multi-part calculations similar to CFA L2? Or even more similar to the BT practice questions, which are driving me insane? Just want to get a gauge

I usually refer to the GARP text for parameter definitions, they are usually provided right before or after the equation

Depends on your background. If you've taken finance courses in grad/undergrad CFA L1 will be pretty much a refresh and can be gamed. I remember punting the entire Econ section because it was only 5-10% of the exam. Seems more difficult w/ the FRM. There are only 4 topics and any concept from...

I just noticed that you have your calculator set to a 360 day count. Try changing that to Act and see what you get. T-bonds are priced on an Actual/365 basis.

I'm not familiar with the HP 10BII+, but I am pretty sure the TI BAII Plus cannot calculate the dirty bond price directly. If you learn it by hand, it is not that hard. Just calculate the price of the bond as of the last coupon date and add the AI on top. The only tricky part is remembering...

Is there a spreadsheet that covers the Tuckman Key Rate 01, Partial 01 and Partial Buckets concepts?

Can I ask how you arrived at the probability of 9 or more exceptions as 15.2%? Is that provided in the question?

On page 172 of the Tuckman reading of Book 4, it states: "In figures 9-2 and 9-3, for any given maturity, zero-coupon yields exceed par yields, which, in turn, exceed the 9% coupon yields." If you look at figures 9-2 and 9-3, the par yield of the C-STRIPS are greater than both the zero coupon...

Related to this spreadsheet example, we are given the 1bps price movement of a call option. Had we not been provided with the prices, are we expected to calculate the DV01 of the call option using the implied vol and strike price info provided?

I see n = # of random variables, but what does m stand for?

We are provided with the following CDF formula for a continuous uniform distribution: (a-b1)/(b2-b1) If b1 represents the lower bound, per the reading, then what does a represent?