Course Course Errors Found in 2024 Study Notes P1.T1. Foundations

[Nicole Seaman]

Please use this thread to let us know about any errors, missing/broken links, etc., that you find in the 2024 materials in P1.T1. Foundations of Risk. This keeps our forum organized. We appreciate your cooperation!

PLEASE NOTE: Our Practice Question sets already have links to their specific forum threads where you can post about any errors that you find. This thread is for any other materials (notes, spreadsheets, videos, etc.) where you might find errors.

Please include this information in your post so we can correct errors:

• Chapter
• Page number
• Specific details about the error

 

[ISiko1513]

Chapter 5, page 17:
In the example calculations the units are inconsistent. I.e,
Treynor = either 0.08 or 8%
Sharpe = 0.2%
Jensen's alpha is ok.

I think that the example should stick to percent notation, so the Treynor is equal to 8%. Otherwise, the Sharpe=0.002 and alpha=0.025.

 

[ISiko1513]

Also, I am not sure if this belongs here, but I will post it anyway - I find it confusing that in the study notes in this chapter "market return" and "portfolio return" really mean "EXPECTED market return". As I understand, a priori a return of a portfolio is a random variable. (Sorry, mathematician here )

 

[David Harper CFA FRM]

HI @ISiko1513 That's a fair precision TBH. "Market return" might refer to either expected (ex ante) or realized (ex post) and it's my opinion that neither is the default. Hopefully you understand it's an item for improvement ... Thanks for the feedback

 

[ISiko1513]

I think it will be useful, especially since in Tracking Error we think about return as a random variable. Anyway - it's clear form the context what do you mean, but as you wrote, I think higher level of precision would be great