# CFA mock Q 79

Did anyone have a hard time with this Q? I dont know how they get 4,225 = [(28,000*500)/(1/3.33)+(.05*500)]. I get 4,229.

me too! but when you calculate the final %, it comes out to the same answer. i assumed it was a typo

I also have \$4229. but I can’t get why it’s \$9800 at margin interest paid. Can someone please explain? Many thanks

I got 4229 also, I think they’re wrong (500*28)/3.33 = 4204, which is the equity 500*28 = 14000 is original amount 14000-4204 = 9796 which is the amount borrowed (I’m a few dollars off, not sure why)

Thanks for the clear explanation.

ikoreaii Wrote: ------------------------------------------------------- > I also have \$4229. but I can’t get why it’s \$9800 > at margin interest paid. Can someone please > explain? Many thanks Yes, that’s what I’m getting too! It’s so frustrating when you spend so much time trying to figure out something where they just made a mistake. I hope it wont happen on the real exam!

its a rounding issue. its the difference of 0.30 * 14000 = 4,200 OR 0.3003 * 14000 = 4,204.2042 the extra 25 comes from the 5 cent commision. 0.3003 comes from figuring out the margin %, which is 1 / 3.33

Why in the answer do they add commission once and then go back and subtract it not once but twice? I understand for the initial investment they add it to the margin that is needed. But then they subtract purchase commission and the sales commission. I thought we originally add it to the inital and subtract it from the gain?