Revised 3 September 2023
When I discover an error in my Survivor’s Guide to CFA Institute Command Words, in my Level III List of Lists, in my Investment Objectives for Institutional Investors, or in one of my mock exams, (or a candidate discovers one and tells me about it), I’ll post an erratum here and make the correction immediately. Therefore, if you see an erratum here, the error may not appear in your copy; I may have corrected it before you downloaded your copy. If your copy has an error listed here, please download a new copy; that error will have been corrected.
To make the corrections easier to spot, I’ve shown the old, incorrect text in blue and the new, correct text in red.
2023 Level III Mock Exam #1 Morning Session
Question 1.1, Full Guideline Answers: The calculation for the BPV of the existing portfolio should be “KHR 220,000,000,000 × 5.7 years × 0.0001″, not “KHR 1,254,000,000,000 × 5,7 years × 0.0001″.
Question 4.2, Full Guideline Answers: “3 marks for the correct value of stock to issue (GBP 36,164,950)” should be “3 marks for the correct value of stock to issue (GBP 64,847,250)”.
Question 6.1, Full Guideline Answers: Included a second, valid computational approach: adding the illiquidity premium at the end. Download the latest version to see the changes.
Question 9.2, Full Guideline Answers: Added, “Furthermore, mutual funds are typically valued based on the closing price each day, so using the closing price as the benchmark price is consistent with the portfolio valuation.“
Question 9.2, Short Answers: Added, “Mutual funds are typically valued at daily closing price“.
2023 Level III Mock Exam #1 Afternoon Session
Question 5.3, Questions: Answer choice c should be Buy BUL, Sell LAD, not Buy LAD, Sell BUL.
Question 5.1, Full Guideline Answers: In the formulae for ∆E(Excess spread) and ∆DurMod, the currencies should be CAD, not USD.
Question 6.4, Full Guideline Answers: Added an explanation of how the original decision price and the arrival price are determined. Download the latest version to see the changes.
2023 Level III Mock Exam #2 Morning Session
Question 7.1, Questions: The question should read, in part, “the Endowment“, not “la Fundación“.
2023 Level III Mock Exam #2 Afternoon Session
Question 6, Case Scenarios: The 27 April closing price should be GIP 17.71, not GIP 17.70.
Question 6.2, Full Guideline Answers: The allocation of marks sentence, “3 marks for the correct paper loss (−90.09 bps)” should be, “3 marks for the correct paper loss (−33.71 bps)”.
Question 6.3, Full Guideline Answers: Added an explanation breaking down implementation shortfall into its component bits. Download the latest version to see all of the changes.
2023 Level III Mock Exam #3 Morning Session
Question 2, Case Scenarios: the first sentence of the last paragraph should read, in part, “. . . the factor model explains 76% of the portfolio’s risk; i.e., R2 = 0.76.”, not “. . . the factor model explains 87% of the portfolio’s risk; i.e., R2 = 0.87.”
2023 Level III Mock Exam #3 Afternoon Session
2023 Level III Mock Exam #4 Morning Session
Question 2, Case Scenarios: Nikiema’s remark should read, in part, “. . . real estate also tends to do well with higher-than-expected inflation . . .”, not “. . . real estate tends to do poorly with higher-than-expected inflation . . .”.
2023 Level III Mock Exam #4 Afternoon Session
Question 4.2, Full Guideline Answers: “EUR 1,238,420,000” should be “XCD 1,238,420,000“. “EUR 430,150,000” should be “XCD 1,238,420,000“).
Question 9.2, Full Guideline Answers: In the (blue) commentary at the beginning of the explanation, the calculation of the maximum total cost should use a share price of ALL 1,510, not ALL 1,540. Download the latest version to see all of the changes.
Question 11.1, Full Guideline Answers: “SRD 20,000,000(1.047)19” should be “SRD 80,000,000(1.047)19“. The remainder of the answer is correct.
2023 Level III Mock Exam #5 Morning Session
Question 5, Case Scenarios: The last sentence in the first paragraph should read, in part, “Exchange-traded derivatives are inexpensive and readily available in KRW“, not, “Exchange-traded derivatives are inexpensive and readily available in Euro“.
Question 8, Case Scenarios: The last paragraph (“One year ago . . . .”) has been rewritten. Download the latest version to see all of the changes.
Question 8.4, Questions, Full Guideline Answers: The question has been rewritten. Download the latest version to see all of the changes.
Question 9.4, Full Guideline Answers: The answer choices listed did not match those in the question. The table has been rewritten to match. The explanation, however, remains accurate. Download the latest version to see the change.
2023 Level III Mock Exam #5 Afternoon Session
Question 5, Case Scenarios: Goal 2 should read, in part, “. . . donate CUP 100 million to a charity in 25 years.”, not, “. . . donate USD 100 million to a charity in 25 years.”.
Question 6.1, Full Guideline Answers: Under the heading “Number of Options Contracts Required“, the denominator in each calculation should be 20,700 × 100. The numbers of contracts, however, remain accurate. Download the latest version to see the change.
Question 6.1, Full Guideline Answers: On the last line, the strike price should be 21,000, not 20,700.
Question 7.1, Full Guideline Answers: The answer choices listed did not match those in the question. The table has been rewritten to match. The explanation, however, remains accurate. Download the latest version to see the change.
Question 7.2, Full Guideline Answers: The answer choices listed did not match those in the question. The table has been rewritten to match. The explanation, however, remains accurate. Download the latest version to see the change.
Question 8.1, Full Guideline Answers: In the last formula, the currency should be CAD, not EUR.