June CFAI Mock Exams: WRONG/ERRONEOUS answers?

My bad! Didn’t see the part about $66 in capitalized interest! Thanks

Guys, in the AM session version (b) … Question 6 of the Fischer case “the very last question of the last case”

shouldn’t the answer be © instead of (a)


I always thought that when required return is less than expected return, the stock is undervalued !!

CAPM predicts a required return of 14%, the expected return is only 12%, thus the stock is overvalued.

What about the Kostecka Case, question #4 (PM exam), why is fair-deal the least likely violation? I would think it would be communicating with clients since that’s about the only thing he did correctly. Still can’t figure this one out

In your opinion, in which respect did he break the Standard about fair dealing?

By implying his client should sell their shares because “he did”

But when EBIT was calculated, the answer says EBIT = Sales-COGS-SG&A

Shouldn’t depreciation be accounted for when calculating EBIT as well? And then to adjust it, add back 34…

I agree, MissM b/c that’s why we add back the depreciation expense (stemming from capitalized interest) to EBIT.

I agree, so he violated the Standard about Communication with Clients. The question is about which Standard was least likely violated by him (=fair dealing).

thanks a alot

I can’t find any of these cases in june mock. Are you guys talking about version b - march?

Fair enough, thanks for the feedback!

I am reviewing the Mock discussed here, which someone pointed out was the March mock. On this thread, it’s noted that the CFA answers might have errors. I looked on the CFAI website and couldn’t find an errata.

Did the CFAI put out errata w/r/t these practice tests?

On the Piezeo question, for the EBIT/Interest Coverage calc, I fully get the calc and its logic, but what I don’t get is why the “Depreciation Expense” mentioned in Note 11, is not in the fully reconciled Income Statement on the page before.

Am I missing something?

Hey Kyle, I was wondering the same thing but after reviewing the course it is because of the difference between gross and net pp+e. In the question it says ‘Long term assets, Net’ in which case depreciation has to be added back here as well as in the line item for +NCC. If it had said ‘Long term assets, Gross’ we wouldn’t need to add the depreciation here. Can someone please confirm this??

Hey guys, it might be wise to review the EOC if the mock exam quetions don’t make sense. I’ve had a few issues as well but EOC might be a better review at this point.

I agree and National Plastics looks wrong to me-

why are we adding depr back to change in fixed assets for the FCF calc? - I do don’t see any indication a disposal occured so the PP&E given is net (we just use change in PP&E)- I think the answer is wrong because they double added deprecation - if there were a disposal then we would add back deprectaion to starting PP&E, and use chnage in PP&E as the plug to get to ending PP&E. Anyone else notice this?

see my post two above yours.

Thanks Lucky_27. What I meant was in the calculation of EBIT, instead of Revenue - COGS - SG&A (which was what the solution provided), shouldn’t it be Revenue-COGS-SG&A - Depreciation expense?

Agree with you on the adjustment of adding back the portion of depreciation attributable to the capitalized interest. It’s just the EBIT formula that really bugs me.

I think my question in the post above is related to this. I am not making sense of the depreciation expense here either