if someone withdraws (-ve cash flow) from the account, do we add or subtract from the MV at time t? I think we should add it back to MV but the sample exam question 52 seems to think otherwise.
sorry i mean question 57.
opposite if they contribute you subtract it if you start with 100 and contribute 5 more and the value at the end of the day of the contribution is 108 you didnt gain 8% more like you gained 3% make sense?
so essentially i agree with what you wrote question3 in reading 43 confirms this
on Q57 of the sample exam there was an outflow of $650000 (given as -$650,000). i don’t understand when they didn’t add it back in the answer.
It was actually an inflow, not an outflow. I dont know if it was a typo with the -650,000 or if they were somehow thinking that a negative external cash flow is Negative to the Investor…