BSAS practice exam Afternoon #33 and 36

CFA Level II
#1

Anyone take the BSAS practice exam this saturday? Am I crazy or did they use the wrong formulas on these?

#2

Anyone?

#3

Yeah, actually found a few errors in the exam and was not pleased with the overall quality. Afternoon #33 is most definitely wrong. Instead of " (1 - payout ratio) " it should have read " (1 - retention ratio) or (1 - b) " As for #36… still need to check it out

#4

I noticed errors too. I believe this happened on the BSAS last year and they issue an addendum to it. The errors were annoying but this exam definitely more closely reflects the difficulty level of the actual test than the CFA mock. Here is what I found: Morning Session: Q: 15 - Based on the CFAI text, doesn’t equity under consolidation/prop consolidation go up now so that it would not yield the same ROE. Equity would be higher under prop con therefore ROE would be lower. I think this changed 1st Q of this year. Q21: Economic pension expense should also equal change in fair value adjusted for employer contributions? That would be 180-173=7. Either way you do it the answer should be the same as the answer in the question? Afternoon session: Q 31: FCFF. Change in net working capital should be 2 not -2? Receivables increased by 5 which would increase change in NWC, inventory decreased by 7 so that would be subtracted, and accounts payable DECREASED by 4 so that would be added back to bring you to +2 change in nwc. 5-7-(-4) = 2. the answer key shows change in net working capital being -2. An increase in AP would decrease nwc and a decrease would increase change in nwc. Q33:the equation in the answer key appears to be wrong. Numerator should be 1+g not 1-g. Growth is positive here. Q 36: RI = BV + (ROE-r)*BV/r-g. The answer key only has the second term…

#5

Not sure about the economic pension expense but I definately agree on the other three. I thought I was crazy when I was taking the test. Does anyone know if they are giving out an eratta?

#6

here are the details on the addendum to the exam. Should be out by Friday. http://www.bsas.org/BSAS_CFA_Exam_Preparation/CFA01.asp

#7

RE: Q15. I thought equity was the same regardless of equity/propconsol/consol…

#8

This exam did have a lot of mistakes. For Q15 equity will be the same under equity or prop, under consol it will be higher due to minority.

#9

Before there was the option to classify the minority interest in the mezz space between liabilities and equity. Looks like that is no longer an option. Thanks DJS_CFA for making me look this up.