Not sure if I’m just catching on very late but just noticed that the Schweser errata shows an update for the return objective calculated in Part A of this question. They have grossed up the spending level to before tax then added inflation etc. I’ve asked Schweser about it and they say that’s how CFA did it in the 2009 exam and how we would be expected to do it…am I the only one who didn;t realise this? I’ve been sticking to nominal pre-tax spending/portfolio assets to get r then doing the usual [(1+r)(1+i)-1]/(1-t)
If i remember correctly, there was a discussion about the return calc. being [(1+r)/(1-t)]*(1+i) I haven’t done the latest exams, but this is how I was planning to do it.