Error in Reading 48 - Mortgage Backed Sector of Bond Market

CFA Level II Fixed Income
#1

Hi all,

just to confirm: in line 5 on p. 418 (Reading 48) it should say “… end of the previous month…” rather than “… beginning of the previous month…”, right?

Thanks

Fef

#2

don’t see this in the errata…

#3

I expected it to be in the errata as well, but it isn’t there. However, logically it makes perfect sense (which is also shown by the calcuation on the same page). Moreover, the very same paragraph exists in the Level 1 CFAI book on the topic, and there it does indeed say " end".

I guess CFAI needs to add this to the errata.

#4

The text looks correct. Mortgage payments are made in arrears, so the Month 1 payment is due on the first day of Month 2.

Obviously the text could be clearer…