2012 Mock Part A ii. Errata?

CFA Level III
#1

Hello,

I am not sure if I am fully understanding this question or it’s an Errata. The questions asks for the duration of the leveraged portfolio. So the formula is Da * (Asset$) = De * (Equity$) + Dl * (Borrowed$). I believe I should solve for Da and not De. The questions says solve for duation of levered portfolio, not that of equity/bond portfolio. Even their legend for formula is kind of messed up. Da = Duration of (Bond Portfolio) and A = (Initial Funds plus borrowed funds), not (Bond Portfolio). Can anyone elaborate on this?. Btw, I got an answer of 3.88 for Da instead of 20.05 for De.

#2

I interpreted this question the same way you did and got 3.88 types answer.

#3

It was confusing since they asked for leveraged portfolio and not specifically asking for the Equity. But duration of assets includes Equity (initial investment) AND borrowed funds.