CFAI BK.1, RD13, Q6

CFA Level II
#1

CFAI Book 1, RD. 13, PG. 453, Q.6 Why do they use a plus(+) sign in the mean-reverting formula and not a minus(-) sign?

#2

I assume you’re talking about the double negative? = b0/(1-b1) Mean reverting level = -0.0405/ (1- (-0.4674)) = -0.0405/ (1 + 0.4674) = -0.0276

#3

Thanks, just another one of my stupid mistakes…leaving out a minus sign.