On Schweser Book 1 page 103 within the answer, Schweser uses the formula: S(0) = $0.6798 * [((1.04)^3)/((1.03)^3)] Isn’t this incorrect? Aren’t they incorrectly saying to use the formula S(0) = E(S(3)) * [((1+Rfc)^3)/((1+Rdc)^3)], when it should be E(S(3)) = S(0) * [((1+Rfc)^3)/((1+Rdc)^3)]? What am I missing? Any explanation would be greatly appreciated.
> S(0) = E(S(3)) * [((1+Rfc)^3)/((1+Rdc)^3)], when > it should be Formula is correct if S(0) and E(S(3)) is DC/FC. > > E(S(3)) = S(0) * [((1+Rfc)^3)/((1+Rdc)^3)]? This formula is also correct if S(0), E(S(3)) is FC/DC.