time horizon with capital outlay definition, education, question, capital, checked

bchadwick

I am quite confused with this topic. I see in several mocks (those shown in the website of CFA e.g. the first question in essay session 2010): Whenever there is a capital outlay e.g. to pay education cost in one year, this one year will be categorized as a stage.

I checked schweser notes, their definition is: whenver there needs a reallocation, there is a new stage. The capital outlay in my example can be seen as some sort of "sunk cost", which will not be taken into the calculation of return or play a role in evaluation of risk tolerence (at least I think so). So no new allocation will take place "in one year" after the payment. Why does it represent a single stage?

Any contribution is welcome. THANKS !!!