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Question regarding Chapter74's example questions (marginal cost method)

Sehwan Jung

New Member
First in page171, answer explains we must multiply 0.5% to both old and new total funds which is $410million. But when compared with the figure74.1's explanation and module quiz 74.2's question 2, I am quite sure that we must calculate : (2.5% x 410million) - (2.0% x 400million) to calculate marginal cost. Is there an error in schweser? Or is it just I got it wrong? Can somebody explain it for me plz?
THX!
 

Nicole Seaman

Director of FRM Operations
Staff member
Subscriber
First in page171, answer explains we must multiply 0.5% to both old and new total funds which is $410million. But when compared with the figure74.1's explanation and module quiz 74.2's question 2, I am quite sure that we must calculate : (2.5% x 410million) - (2.0% x 400million) to calculate marginal cost. Is there an error in schweser? Or is it just I got it wrong? Can somebody explain it for me plz?
THX!
Hello @Sehwan Jung

When you say "page 171," which source are you referring to? I see that you ask if there is an error in Schweser, but it doesn't state if page 171 is from their materials or from another source. Since we provide our own materials as a prep provider, we do not purchase Schweser's materials so we cannot see what you are referring to (e.g. Figure 74.1) and it is difficult for anyone to answer questions if they do not have all of the information.
 
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