Probably just a misprint but I just want to make sure that it is indeed wrong. In table 1 on page 533 in Book 1 the line item for ‘Foreign investment in the United States’ under the Capital Account is listed as -1,212. Should that number actually be positive? It seems that way when looking at how all of the accounts flow through, but I just wanted to be sure. Thanks!
I really hope BOP isn’t tested again, but you are definitely onto something here. The 2008 books have a very similar chart but with 2003 data- in that version it has the foreign investment as a positive # (as you alluded to) with the exact same description in the text, that the amt was the net amount that the US borrowed. But going even 1 step further in this little mess of a chart- in the 2008 books, it has the statistical discrepancy denoted as a negative # but again has the same text saying “combining the discrepancy with the measured net foreign borrowing gives a captial acct balance of ___”. so 2008 books if it was the same numbers show a 1212 positive, the 444 negative, and the 10 as negative. Which makes adding them together to get the capital acct balance quite intuitive. I have a feeling that not only the foreign investment, but the statistical discrepancy sign in this year’s version are backwards. Can you email the CFAI and maybe they can add it to their errata? Especially after last year’s debaucle that was 2 BOP questions where you essentially had to do just this- know the components of let’s say the capital account balance and then either add/subtract to get at a number… I’d like to know with clarity that the signs are correct. Good catch.
I have submitted an erratum item for this, and it has been accepted as a right erratum. Another error you might want to note (which has also been accepted) Erratum 1: Book 1: Economics Reading 17: Currencies and Exchange Rates Page 531 First formula on the bottom of the page reads as RER x E = (P/P*) This formula is different from the same formula on the Page 518 – which is talking about the same topic. I believe the formula on Page 531 should be the same as on Page 518 – which is RER = E x (P/P*)
awesome, thank you- just marked it in my book. i studied mainly schweser last time around, so i need to go bookmark the CFAI errata page and take a look every so often. edit- CPK, you seem good at quant- you want to help a sis out and check out my SS11 q from a few hrs ago?
Thanks guys, I didn’t catch those other two discrepencies.