R17_ is there a typo in white exp following exp 11 ??

CFA Level III Portfolio Management
#1

Hi all,

I hope it’s not against the rules to quote the paragraph I’m referring too :

"

4- Finally, the fourth goal is a wish with a 20-year time horizon and a 75% required probability of success. Module F is again the best module, and the discounting of a US$10 million payment 20 years from now at the 6.8% expected return from Exhibit 36 points to a required capital of US$2,426,000 today.

(Institute 298)

Institute, CFA. 2018 CFA Program Level III Volume 3 Applications of Economic Analysis and Asset Allocation. CFA Institute, 07/2017. VitalBook file."

In point 4, of the white exp following exp 11 in the book, we are supposed to discount $10 M with IR=6.8% and N=20y ==> supposed to be a basic question from L1, calculator gives $2,682,717.17 , why in curriculum it’s 2,426,000 ???

and by the way , the mistake is related by some prep providers too , that why I’m wondering how did they come up with it ??

Thanks a lot for your help :slight_smile:

#2

Have a look at the errata and see if it is noted there:

https://www.cfainstitute.org/Eratta/2018_level_III_errata.pdf

#3

It is.

#4

thanks a lot guys, I thought nobody paid attention to my query :slight_smile: Gladly it turns out to be just a typo