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Basic Question 1 of 2
Which is the characteristics of a broad bond index?
I. Easy to fully replicate
II. Frequent rebalancing
III. Large number of constituents.
User Contributed Comments 6
| User | Comment |
|---|---|
| loisliu88 | can anyone explain it for me. thanks |
| Patrick15 | the discounted payback rate will decrease the value of the returns, the payback period maintains the present value without discounting, so each payment is worth relatively more |
| jonan203 | if a $1,000 investment pays $250 every year for four years, if you discount each $250 payment by x% discount rate, you wouldn't have your $1,000 investment back in the fourth year no matter what discount rate you used. the larger the discount rate, the larger the payback period becomes |
| Shaan23 | DOes it matter if its Conventional or Non conventional? Isnt it the same for both? |
| jabiller | I believe conventional means always positive cashflow and non means there would be negative cashflows or returns. |
| MathLoser | Time value of money, guys. |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe types of fixed-income indexes
CFA® 2025 Level I Curriculum, Volume 4, Module 3.