In the latest mock exam, the CDS price appreciation shows:
CDS 10-year Price = 0.9125 = 1 + [(1% − 2.00%) × 8.75]
CDS 9-year price = 0.928 = 1 + (1% – 1.90%) × 8.0
And the appreciation is Price appreciation = 1.70% = (0.928 – 0.9125) / 0.9125
However, based on the Example 29 at Curriculum Volume 3, the price appreciation convention is:
CDX IG: 99.066 per $100 face value, or 0.99066 (= 1 + (1.00% – 1.20% × 4.67))
CDX IG: 99.244 per $100 face value, or 0.99244 (=1 + (−0.20% × 3.78))
G/L = 17,800 = (0.99244 – 0.99066) × $10,000,000; instead of (0.99244 – 0.99066)/0.99066.
Could someone help me and confirm which convention is right, using % or absolute difference between prices?