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Basic Question 10 of 12
Which factor is most likely the change in the yield curve level?
A. Factor 1
B. Factor 2
C. Factor 3
User Contributed Comments 2
| User | Comment |
|---|---|
| ashish100 | Wtf wish they'd explain this better. AN please explain 100 dollars don't grow on trees brah |
| davidt87 | ashish100 i'm hating this section too. i guessed it because i assume a change in level of the curve will impact each rate in the same direction, and all of Factor 1 values were negative. Factor 2 appears to be steepness as you can see the shorter term rates are positive while the longer terms are negative - if you imagine how that would change a graph I think it would flatten it Factor 3 appears to be curvature because the middle is sinking and the short/long term values are positive Disclaimer: i have no fcking clue whats going on in this reading |
You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu
Learning Outcome Statements
explain how a bond's exposure to each of the factors driving the yield curve can be measured and how these exposures can be used to manage yield curve risks;
explain the maturity structure of yield volatilities and their effect on price volatility.
CFA® 2025 Level II Curriculum, Volume 4, Module 26.