YEO - 2005 CFAI - AFter tax nominal Return

CFA Level III
#1

FOr 2005 this question seems fair game. The solution provides little and just states the Net investable assets. I have no clue how they’re getting it. Anybody do this question?

Any help is much appreciated. I cant figure out how they got 10, 295, 600 of net investable assetss or the distribution of 516500 in year 1.

Thanks

#2

So I figured out the distribution in in year 1 as 516500.

516500 = 100 000(Dontation) + 250 000*(1.03) + 150 000*(1.06)

And that’s correct.

Now for the Net investable assetsInvestable assets = 1,221,600 (Year Now Investment portfolio) +9,324,000 - 507,500 = 10,038,100

Using ( 1221600 = 1,200,000+30,000(Income)-8,400(Tax))

9,324,000=450,000+500,000+8,500,000-126,000 (Tax)

But my answer of 10,038, 100 is off from what it should be at 10,295,600.

The solution gives nothing as to how they got it.

#3

Never mind, got it. If any of you haven’t done this question I would. Good.

10, 295,600 = 9324 000 + 1,221,600 - 250 000 = 10,295, 600

Thanks Cipherap.

#4

just please note that this exam was the last time they had a multiple year set up in the question. Most of the other Indiv Investor questions have a 2 year setup - now and later kind of deal.

#5

Ok. Thanks, Even as a multiple year set up, it was a good question as to how to set up the equations. Tougher then the ones now.