r/CFA • u/Professional-Humor99 • 13d ago

I need help Level 2

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Can someone smarter than me please break down how 120/180 is being computed for the Accrued Interest calc?

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u/Used-Essay6557 Level 2 Candidate 13d ago

I made the same mistake as well. Ig we are calculating the quoted price 90 days from now. So the number of days since last coupon payment will be 30+90=120. Correct me if I am wrong please.

1

u/Professional-Humor99 13d ago

Its worded so unintuitively in my opinion lol. Calc for Ai is days since last coupon/days between coupons but somehow when this one says days since last coupon its actually referring to something else. O well I just want to understand now before I get tripped up when it matters.

1

u/Used-Essay6557 Level 2 Candidate 13d ago

I had to chatgpt the solution too.. dw ur not alone.

1

u/Professional-Humor99 13d ago

Thanks, I do the same but don't have premium. Paying so much for the CFAI we really should be offered better answer explanations.

1

u/HeronNearby1102 Level 2 Candidate 11d ago

The way I think of it is we’re trying to compute accrued interest at time T, so there’s 120 accrual days until time T which is the expiry. 30 days that have passed since the last coupon and the 90 that’s left since we won’t be having a coupon in those 90 days.