Greetings and thanks in advance for any help.
2013 Level One Volume 5 page 511
section on Theoretical Spot Rates/bootstrapping
In solving the exampke they work thru, I am getting lost on the very last step which I think is algebra:
101.75/(1 + z3)3 = 96.5822 (OK so far)
(1 + z3)3 = 101.75/96.5822 (OK here0
z3 = 0.0175265 (this is where I get lost)
Just can’t solve for z3. Am thinking it might be (101.75/96.5822) 1/3 power??
please help and thanks!!
ChipM
Howdy!
You’re welcome in advance.
I got lost here, too. I get (1 + z)³ = 101.75 ÷ 96.5822 = 1.053507.
Well, 1 + z = 1.053507¹´³ = 1.017527, so z = 0.017527 = 1.7527%.
My pleasure.
I think I have it
Know how to get 1.053507
To raise 1.053597 to the 1/3 power with my BA II
–input 1.053507
–press the (yx) key
–input 3, and press the (1/x) key
–press (=) to solve
==>calculattor displays 1.02 (rounded)
With this number now obtained, it is simple addition to get to 1.7527
If 1 + z = 1.017527, z = 1.017527 - 1 = .017527
All correctly done?
In spades.
S2000magician, I owe ya two beers now!! I’m not taking the exam till June '14 so we may be up to a case by then 
Interestingly both Schweser and AnalystNotes say the concept of bootstrapping is one of the most difficult things you could be asked as a L1 candidate, so it may not be worth the two or three hours it took me to really understand it and work through all the examples, but I feel better having done so.
I knew that the commitment I would have to make to have bootstrapping down pat was excessive and would just cause me stress, so I never reviewed the concept after my first reading, or did any of the practice questions, and I believe it was the right decision.