gargi.adhikari
Active Member
Hi in reference to Tuckman Chapter 4:-
Shocking Up vs. Shocking Down Yield :-
There are instances in Tuckman -Chapter 4, where it is mentioned that Shock Up Yield by 1 bps means , new Yield= ( Initial Yield - 1bps). if Initial Yield = 5 %, then New Yield = ( 5 % - 1bps ) = 4.99 %
Question/clarification around this:-
With Shock-Up, should we not add the 1bps to the Yield instead of subtracting ? So, in this case, New Yield with 1 bps Shock Up = ( 5 + 1bps ) = 5.01 % instead of a 4.99 %..?
Shocking Up vs. Shocking Down Yield :-
There are instances in Tuckman -Chapter 4, where it is mentioned that Shock Up Yield by 1 bps means , new Yield= ( Initial Yield - 1bps). if Initial Yield = 5 %, then New Yield = ( 5 % - 1bps ) = 4.99 %
Question/clarification around this:-
With Shock-Up, should we not add the 1bps to the Yield instead of subtracting ? So, in this case, New Yield with 1 bps Shock Up = ( 5 + 1bps ) = 5.01 % instead of a 4.99 %..?
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