Sign up  |  Log in

Goals-based asset allocations

Current expenditures are USD 500k, which will be inflated by 2 % a year from year 2 onwards. 

” the first goal is a need, with a 5-year time horizon and a 95 % probabillity of success. Discount rate is 2.3 %. 

How do you get USD 2.43 mln here as a required initial investment?

"Schweser is a must for Level III CFA. This exam is different from the others and Kaplan will have you ready by the time June is here." - Matthew S., 2017 Schweser Student

500, 510, 520.2, 530.604, 541.21608

discount at 2.3%

to find PV

I got 2485.38 …


thanks a lot! I got USD 2,429,502 now, close enough:)

Hi, I’m struggling with the three exercises following this one. Any hints? Thanks in advance!

2). 25-year time horizon starting from year 6, discount rate of 6.1%, current expense 500k, inflation 2%. How to get initial requirement of 4978k?

3). 10-year time horizon, to make a payment of 10m, discount rate 4.1%. How to get 6.671m initial capital? I got 6.691m

4). 20-year time horizon, to make a payment of 10m, discount rate 6.8%. Hot to get 2.426m initial capital?