In my Schweser books, I have them giving us the Size of Up-move being 1.15.
The down move is thne said to be 1 / Up move = 0.87.
Easy enough.
Then in the CFA book, the question said that the stock price can go up by 10 percent or down 15 percent. If you do 1 / 1.10 = 0.90.
WHat I should have used is just 1.10 and 0.85, and not did the 1/ up move formula. Do you only use this formula if they do not tell you the down move amount?
I remember that question and thought it was BS. I don’t recall any examples from CFAI problems where you had to derive the U or D movement percentage. On the exam I would use them if they are given but if not then use that formula to derive the rate.