Sign up  |  Log in

proposed strategic expected return

Hi all, in EXAMPLE 5 of the REAL ESTATE session (Adding Real Estate to the Strategic Asset Allocation); Solution 2 stated:

Solution to 2:

L3V5R30-113 The proposed strategic asset allocation’s expected return of 4.9% falls well short of the (1.05)(1.02)(1.0020) – 1.0 = 7.31% return objective based on the description of the problem.

Could some one help me understand how to arrive at this 7.31%, what formula to use?

Thanks

Schweser CFA® study packages are the key to CFA exam success. Serious about the passing the CFA exam? Just choose Schweser.

Spending rate, inflation, management fee, respectively.

Reread the example, then go back and reread Reading 15, section 3.

You have to be able to pull the pertinent facts out of a vignette quickly.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams
http://financialexamhelp123.com/