V1 Module 2 Errata: Types of Financial Returns

1. Exhibit 3 Labels 0.8186 and 0.8793 as USD/EUR Instead of EUR/USD

Curriculum location: Types of Returns for Financial Assets, Instruments, and Indicators, Exhibit 3 in the Ørsted bond case, p. 54.

"USD/EUR 0.8186"

"USD/EUR 0.8793"

CFA defines $A/B$ as units of price currency $A$ per one unit of base currency $B$. The two exhibit values are euros per US dollar, so they are EUR/USD quotations. The surrounding prose correctly labels the reciprocal values 1.2216 and 1.1373—US dollars per euro—as USD/EUR.

Correct reading: Change only the two Exhibit 3 labels to EUR/USD 0.8186 and EUR/USD 0.8793. Keep the prose labels USD/EUR for 1.2216 and 1.1373.

The printed exhibit can otherwise make candidates invert the exchange rate and reverse the price and base currencies.

2. The FX Calculation Prints -9.61% from Inputs That Produce -9.62%

Curriculum location: Types of Returns for Financial Assets, Instruments, and Indicators, Ørsted bond case, overall USD-return calculation, p. 55.

$(1-0.0291)(1-0.0691)-1=-9.61\%.$

The displayed factors evaluate to $-9.618919\%$, which rounds to $-9.62\%$, not $-9.61\%$. The line immediately above reports the currency return as $-6.90\%$; using $0.0690$ in the overall-return formula reproduces the displayed result.

Correct reading: Keep the rounded inputs and result consistent: $(1-0.0291)(1-0.0690)-1\approx -9.61\%$. If $0.0691$ is retained instead, the displayed result must round to $-9.62\%$.

A candidate who multiplies the printed factors correctly otherwise cannot reproduce the case's worked USD return and may waste time troubleshooting a calculation that is not wrong.

3. The Corporate-versus-Government Bond Return Direction Is Reversed (7.43% vs 7.62%)

Curriculum location: Types of Returns for Financial Assets, Instruments, and Indicators, Historical Long-Term Asset Returns, p. 59.

"Differences between corporate and government bond indexes suggest that corporate bonds generate slightly higher aggregate returns than government bonds."

Exhibit 8 on the same page reports geometric mean total returns of 7.43% for US corporate bonds and 7.62% for US Treasury bonds. The next page also says corporate bonds underperformed government bonds.

Correct reading: Over the displayed 1979–2023 period, government bonds generated slightly higher aggregate returns than corporate bonds.

Candidates can otherwise reverse which bond series outperformed in the curriculum's own data.

4. The Debt-Outperformance Formula Omits −1

Curriculum location: Types of Returns for Financial Assets, Instruments, and Indicators, Knowledge Check: Differences in Debt Returns, Question 1 solution, p. 61.

$\frac{1+7.62\%}{1+7.43\%}-1=\frac{1.0762}{1.0743}=0.18\%$

The ratio $\frac{1.0762}{1.0743}$ is approximately 1.0018, not 0.18%. The second expression also needs to subtract one.

Correct reading: $\frac{1+7.62\%}{1+7.43\%}-1=\frac{1.0762}{1.0743}-1\approx 0.18\%$.

Candidates otherwise risk confusing a growth ratio with the relative return derived from it.

Complete Module 2 Body-Text Errata Index

Scope: Module 2, pp. 49–69 (printed page numbers).

What this review covers. Errors in the printed curriculum that would change a candidate's answer or understanding: wrong numbers, wrong formulas, reversed logic, and statements that contradict the module's own data. It does not list spelling mistakes, equation-numbering slips, or wording that is loose but defensible.

References

• CFA Institute: Currency Exchange Rates

This article is an independent candidate-focused analysis of confirmed errors in the CFA Level I 2027 Curriculum, Volume 1 Quantitative Methods, Module 2 Types of Financial Returns. It is not an official CFA Institute errata notice, and inclusion here must not be read as CFA Institute confirmation, endorsement, or approval.