Human Capital CFA 2017 AM Mock

CFA Level III Portfolio Management
#1

Hi all,

the CFA books give us the formula to calculate the PV of the Human Capital and in particular, the denominator is (1 + r + y)T where:

r: risk free rate, y: income volatility and T: period.

Now, in the CFA 2017 AM Mock in the solutions they not only take into account the risk free rate and the income volatility but also the Annual wage growth rate.

Why? I can’t find any example like this in the books! Is it possible that the Mock is wrong?

#2

nobody?

#3

What is in nominator? I mean nominal to nominal, real to real measure. Last year it was the issue too but I cannot recall.