Focus review 4 . isses related to : GARP 2011. P1, e1, 15

[Addy]

Hi David,

in Question: GARP 2011. P1, e1, 15.. (CTD Bonds delivery question)..

Why do we not make use of the Accrued Interest Concept. !! Why it was given in the question?

technically the AI should be added to the Quoted Bond price. Then new QBP - CF x Settlement .. should give us all three answers and the lowest is the selected.

 

[David Harper CFA FRM]

Hi Adnan,

Yes, you are correct, it is absolutely a mistake (the wrong approach only works coincidentally), submitted to GARP last year, see http://forum.bionicturtle.com/threa...conversion-factors-markets-and-products.4113/