Calculating Accrual Equivalent Tax

CFA Level III Portfolio Management
#1

Hi,

A comparison of the 2017 vs. 2018 LOS shows that LOS c.c_alculate accrual equivalent tax rates and after-tax returns_ in Reading 9: Taxes and Private Wealth Management in a Global Context is no longer there in the 2018 syllabus.

Could someone confirm if this is correct and we won’t be tested on this in June? The actual reading itself still includes the section on calculating Accrual Equivalent Returns…

I am a little concerned that it will re-appear in the 2018 exam because I struggled with this and it unfortunately appeared in the 2017 actual exam (although this had never appeared in previous morning exams and I continued to assume it wouldn’t be an essay question).

Thanks!

#2

For what it might be worth, this was not covered in the Kaplan study materials, however it was covered in the Wiley’s lecture video for this reading AND it was, alongside TAE, asked in a multiple choice format in the 2018 reading’s EOCs.

#3

Come on, we are targeting the Charter, We need to know that basic

it starts from simple Return after tax=Return gross*(1-T) just change indexes and through albegra you can derive any variable from the formula

Rae=r(t-Tae)

#4

This has nothing to do with OP’s original question… but yes, whether or not it will be relevant for 2018 should matter little, the calculation is very straightforward and intuitive.

#5

Rather than algebra, try to explain what such tax return meaning is. It matters on level 3 more than before.

#6

Thanks Black8Mamba23 & Flashback.