CFA mock Q 79 225

whew1110

Did anyone have a hard time with this Q? I dont know how they get 4,225 = [(28,000*500)/(1/3.33)+(.05*500)]. I get 4,229.

Bulla564

I also have $4229. but I can't get why it's $9800 at margin interest paid. Can someone please explain? Many thanks

MythosHF

I got 4229 also, I think they're wrong

(500*28)/3.33 = 4204, which is the equity

500*28 = 14000 is original amount

14000-4204 = 9796 which is the amount borrowed (I'm a few dollars off, not sure why)

suyash1989

Thanks for the clear explanation.

Beatnik

ikoreaii Wrote:
-------------------------------------------------------
> I also have $4229. but I can't get why it's $9800
> at margin interest paid. Can someone please
> explain? Many thanks


Yes, that's what I'm getting too! It's so frustrating when you spend so much time trying to figure out something where they just made a mistake. I hope it wont happen on the real exam!

Finalnub

its a rounding issue. its the difference of

0.30 * 14000 = 4,200
OR
0.3003 * 14000 = 4,204.2042

the extra 25 comes from the 5 cent commision.

0.3003 comes from figuring out the margin %, which is 1 / 3.33



Edited 1 time(s). Last edit at Friday, June 3, 2011 at 10:05PM by mnieman.