R1 - BSC

mtlmtl
edited March 2019 in Odomirok.19-RBC

Hey, so I just wanted to clarify on the "Notes on the BSF term" in the Wiki.
The overall formula in the wiki is R1 = BC + BSC + ACC.
From there, the wiki has: BSC = [BSF -1] x BC

First question:
re: "If (bond count) > 1300 then BSF is set to 0."
Should this be 1 (or refer to BSC instead of BSF?) As it is, you get BSC = [0-1] x BC = -BC, which seems counterintuitive?

Second question:
re: "In general BSF = sumproduct [ (# issuers, weights) / sum(# issuers) ]"
Should the denominator be outside of the sumproduct formula?

Comments

  • grahamgraham

    Yes, you're right on both counts. I've corrected the wiki. But I also noticed I did something slightly different to Odomirok.

    • Odomirok defines the Bond-Size-Factor as the average bond size minus 1
    • I defined Bond-Size-Factor simply as the average bond-size-factor. Then I subtract 1 before multiplying by the Bond Charge.

    That makes more sense to me, but it may be confusing since it's different from the source text. The text actually says the bond-size-factor = 0 if number of bonds > 1,300 so that's where I got that from, but in my notation, it's really that BSF = 1 so that (BSF-1) = 0. (Nobody else has mentioned that discrepancy to me.)

  • jasonchwjasonchw

    Do i need to recite the weight for BSC for exam?

  • Staff - ACStaff - AC

    If they ask you to calculate the bond size charge, they may expect you to know the weighting scheme for the bond size factor.

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