easy · FRM Part 1 Valuation and Risk Models
Formula-and-meaning check before application in Valuation and Risk Models.
Within Valuation — Fixed-Income Valuation, Duration & Convexity, which statement correctly describes Present value?
- future cash flow discounted at an appropriate rate
- cash-flow-time weighted average time to receive a bond’s payments
- approximate percentage price sensitivity to a small yield change
- curvature adjustment that improves duration-based bond price estimates
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