Errata

Revised 19 February 2023

When I discover an error in my Survivor’s Guide to CFA Institute Command Words, in my Level III list of lists, 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: “1 mark for correctly interpreting the positive sign as buying / taking the long position” should read, “1 mark for correctly interpreting the negative sign as selling / taking the short position“.

Question 1.2 Full Guideline Answers: “1 mark for correctly interpreting the negative sign as selling / taking the short position” should read, “1 mark for correctly interpreting the positive sign as buying / taking the long position“.

Question 7 Case Scenario: To provide more clarity, the paragraph at the bottom of p. 14 has been changed from “The Vassells have decided to make a donation of 50% of their excess capital to a local hospital to be used for research into a cure for leukemia.” to “Oscar has determined that the Vassells have more capital than they require to cover the remainder of their expected lives. They have decided to make a donation of 50% of that excess capital to a local hospital to be used for research into a cure for leukemia.“

Question 9 Case Scenario: The list of transactions should include a footnote that BBD = Barbadian dollar; BBD 2.00 = USD 1.00.

Question 9.1 Full Guideline Answers: For the calculation of missed opportunity cost, the formula should read, in part,”(20,000 − 16,000)“, not, “(20,000 − 4,000)“.  The rest of the calculation is correct.

Question 11.4 Full Guideline Answers: The explanation should read, in part, “The Furtado Fund has a 1-year 99% CVaR of −21.2%, which exceeds the trustees’ loss threshold, so it is inappropriate. Both the Fortès and Rosa Funds, however, have 1-year 99% CVaRs that meet the threshold.“

2023 Level III Mock Exam #1 Afternoon Session

Question 1 Case Scenario: In Exhibit 1, the convexity for Bond C should be 74.87 years2, not 74.07 years2.

Question 9 Case Scenario: In Exhibit 3, then spot exchange rate should be, “EUR/USD 0.9595“, not, “EUR/USD 6.77“.

2023 Level III Mock Exam #2 Morning Session

Question 6.2 Full Guideline Answers: The calculation should read, in part, “−[(0.487)(−0.10%) + (2.384)(−0.20%) + (2.201)(−0.50%)]“.  The final answer should read, “EUR 3,311,406“, not, “EUR 1,358,980“.

Question 6.2 Short Answers: The answer should read, “EUR 3,311,406“, not, “EUR 1,358,980“.

Question 8.1 Questions: The answer choices should be:

  1. 2.17%
  2. 3.09%
  3. 3.77%

Question 8.1 Full Guideline Answers: The answer choices and explanation have changed completely.  Download the latest version to get the full update.

Question 9.4 Questions: The question should read, “For the AUD bond that Young-Gwon intends to purchase, determine whether or not he can hedge the currency exchange rate risk fully.  Explain your determination, based solely on the information given.“, not “For the AUD bond that Young-Gwon intends to purchase, explain why he cannot hedge the currency exchange rate risk fully, based solely on the information given.“

2023 Level III Mock Exam #3 Morning Session

Question 4 Case Scenarios: There was a typographical in the second paragraph.  It should read, in part, “. . . Ismail decided to buy 15,000 shares of Jibon Manufacturing Corporation . . . .“

Question 8.2 Full Guideline Answers: The denominator should read, “XPF 9,500 billion × 7.63%“, not, “XPF 9,500 billion × 6.19%“.

2023 Level III Mock Exam #3 Afternoon Session

Question 4.2 Full Guideline Answers: There was a typographical in the formula for the duration of equity.  Download the latest version to get the full update.  The final answer was correct as shown.

2023 Level III Mock Exam #4 Morning Session

Question 3.1 Questions: The exchange rate should be, “ORM/EUR“, not “KWD/EUR“.  Similarly for the Full Guideline Answers.

Question 11.1 Questions: The stock should be, “BYA“, not “RCA“.  Similarly for the Full Guideline Answers.

2023 Level III Mock Exam #5 Morning Session

Question 7 Case Scenarios: “Confirmation bias” should be removed from the list of possible biases.  Similarly for the Questions, Full Guideline Answers, and Short Answers.

Question 8.4 Questions: The answer choices should be:

  1. −5.80%
  2. −5.37%
  3. −4.94%

Question 8.4 Full Guideline Answers: The answer choices and explanation have changed completely.  Download the latest version to get the full update.

2023 Level III Mock Exam #5 Afternoon Session

Question 1.1 Full Guideline Answers: The correct answer is Ovalle, not Botello.  The explanation has been adjusted to reflect the correct answer.  Download the latest version to get the full update.

Question 2.2 Full Guideline Answers: The explanation was updated to correct an error regarding broadly available pooled investments.  Download the latest version to get the full update.

Question 4.1 Full Guideline Answers: The calculation of the effective allocation to fixed income has changed.  Similarly for the Short Answers.  Download the latest version to get the full update.