Has anyone done this one? The answer/explanation looks wrong to me, but there’s no errata. The exchange rate is quoted as $/CHF. Wouldn’t the spot rate be discounted by the Swiss interest rate, and not the US interest rate? I’ve checked examples in both the Stalla books and the CFAI books, and it seems inconsistent with the answer/explanation. Is there something that I’m missing?
I had the same thought last night when I was looking at that question…im going to go with the cfai text unless someone else can explain why we use the US Rf ? on that note, do you agree with Stalla q 57 of exam 1 ? Its been amended but the amendment i think is unnecessary ie the old answer looked right…what do you think? shouldnt the cap gain tax be applied to the full amount of 230,525?
I’m glad I’m not the only one that noticed it… Both the CFAI materials and the Stalla Study Manual use the same formula, and it is NOT the same as the formula they used to explain the answer in #57. I think the answer to the question is wrong. I’ll have to look at #57 in Exam 1 in more detail - I’ll post on it this evening.
…any other Stalla users care to help?
Sorry, I didn’t get a chance to look at the question from exam #1. They just posted an errata for exam #3, question 57.
Stalla people … someone please help me out here… heres the link to the amended answer for question 57 of exam 1… why has the capital gain amount been reduced ? Is this right? http://www.stalla.com/errata/pdfs/L2_PE1_Q57_-_Revised_Solution.pdf