# Sloppy text

So the whole host of typos in the CFAI textbooks are bad enough, but then one finds this:

“In the example of a single cap, we looked at the exercise rate and 8 rates above and below for a total of 17 rates. For five distinct rate resets, this same procedure would require 5^17 or more than 762 billion different possibilities.” (Level III 2013 Volume 5 Alternative Investments, Risk Management, and the Application of Derivatives. page(414).) Shouldn’t this be 17^5 or 1,419,857 possibilities? Pick one out of 17 rates, do it 5 times. 17 possibilities for the first rate, 17 for the second, and so on, for a total of 17 * 17 * 17 * 17 * 17 = 17^5. Are they trying to propagate the stereotype of finance guys being innumerate?

There’s a bunch of mistakes all throughout the curric.

each rate itself is a changing quantity. (and 1 rate has 8 rates above, 8 rates below + the rate itself) - so 17 for each distinct rate.

I think the book is right

sounds very similar to that old puzzle - there is 3 errors in this sentence. Spot them.

I don’t see how the book can be right.

There are 5 resets, and each time the rate could be one of 17. So 17^5.

If you had 17 resets with 5 possible rates, it would be 5^17 paths.