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2024 Cfa Level I Errata

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21 views3 pages

2024 Cfa Level I Errata

Uploaded by

oneautumnwinter
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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2024 CFA Program: Level I Errata

27 September 2023
If you find something in the curriculum that you think is in error, please
submit full details via the form at http://cfa.is/Errata.

The eBook for the 2024 curriculum is formatted for continuous flow, so the text will fit all
screen sizes. Therefore, eBook page numbering—which is linked to section heads—
does not match page numbering in the print curriculum.
 Corrections below are in bold, and new corrections will be shown in red; page numbers
shown are for the print volumes.
 The short scale method of numeration is used in the CFA Program curriculum. A billion is
109 and a trillion is 1012. This is in contrast to the long scale method where a billion is 1
million squared and a trillion is 1 million cubed. The short scale method of numeration is the
prevalent method internationally and in the finance industry.

Volume 1
Rates and Returns (Quant LM1)

 A paragraph should be added immediately preceding Example 7 (page 16 of print): The


harmonic mean only works for non-negative numbers, so when working with returns that
are expressed as positive or negative percentages, we first convert the returns into a
compounding format, assuming a reinvestment, as (1 + R), as was done in the
geometric mean return calculation, and then calculate (1 + harmonic mean), and
subtract 1 to arrive at the harmonic mean return.

 The first Practice Problem (page 38 of print) should read, “The nominal risk-free rate is
best described as the sum of the real risk-free rate and a premium for:”

Portfolio Mathematics (Quant LM5)


 The last line of the Solution to 3 in Example 1 (page 157 of print) should read:
σ(Rp)= 99.721/2 = 9.99%

Simple Linear Regression (Quant LM10)


 In the lesson “Hypothesis Tests in the Simple Linear Regression Model,” Equation
20 (p. 286) should read,
b 0  B0 b 0  B0
tintercept   Se .
sb 1 X2
0
 n
n  ( X i  X )2
i 1

 In Exhibit 24 (page 286 of print), the equation in Step 5 should read,

4.875  3.0 1.875


tintercept    0.7905.
1 6.1 2 3.4596× 0.68562
3.4596  
6 122.64
And Step 6 should read, “Do not reject the null hypothesis. There is not sufficient
evidence to indicate the intercept is greater than 3%.”

Volume 2
Analyzing Balance Sheets (FSA LM3)
 In the Ratio Analysis practice questions, the Solution to 2 (page 477 of print) should
read:
B and C are correct. The ratios are shown in the table below. The quick ratio and
current ratio are lower in 2017 than in 2016. The cash ratio is slightly higher in
2017 than in 2016.
In the table in the solution the Cash row should read:
Liquidity Ratios Calculation 2017 € in millions 2016 € in millions

Cash (Cash + Marketable (€4,011 + 0) ÷ €10,210 = (€3,702 + 0) ÷ €9,674 = 0.38


securities) ÷ Current 0.39
liabilities

Volume 3
Equity Valuation: Concepts and Basic Tools (Equity LM 8)
 In Example 14 (page 596 of print), the last sentence of the second paragraph should
read, “Thus, total revenues for Boeing are expected to be about a fifth higher than those
for Airbus.”

Volume 4
Mortgage-Backed Security (MBS) Instrument and Market Features (FI LM19)
 In the Practice Problems at the end of the learning module, Practice Problems 7 and 8
should be one question (page 524 of print). The solution to this practice problem
appears as the solution to 7, and the subsequent solutions are all off one number: The

2
solution to 8 in print is actually the solution to Practice Problem 9, the solution to 9 in
print is actually the solution to Practice Problem 10, etc.

Volume 5
Pricing and Valuation of Futures Contracts (Derivatives LM6)
 In Example 2 (page 131 of print), the last two calculations should read,
PV0(C) = $1.99 = [$2(1.02)0.24982].
and
f0(T) = ($1,770.00 + $1.99)(1.02)0.24982
= $1,780.78 per ounce.

Valuing a Derivative Using a One-Period Binomial Model (Derivatives LM10)


 Equation 8 (immediately before Example 1, page 224 of print) should read:
V1 = €12 = €11.43 (1 + 0.5)
 The first instance of Equation 9 (page 228 of print) is correct as is, but where it is
repeated in the paragraph after Equation 10 (page 229 of print), there is a typo. The
correct equation is:
( c1u  (1   )c1d )
c0 
(1  r )T

Volume 6
Guidance for Standards I-VII (Ethics LM3)
 In the lesson “Standard IV(A): Recommended Procedures,” part of the text under
Incident-Reporting Procedures (page 323 of print) is not appearing. The full
paragraph is as follows:

Members and candidates should be aware of their firm’s policies related to whistleblowing
and encourage their firm to adopt industry best practices in this area. Many firms are
required by regulatory mandates to establish confidential and anonymous reporting
procedures that allow employees to report potentially unethical and illegal activities in the
firm.

Ethics Application (Ethics LM5)


 Under “Conduct as Participants in CFA Institute Programs” (page 460 of print), the first
sentence of the Analysis should read, “C is correct.” The first sentence of the last
paragraph should read, “B is incorrect.”

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