I'm begging someone to validate for me that these questions and answers are WRONG that CFAI is giving. Selling receivables to a consolidated SPE would not affect leverage or liabilities to total capital. No way.

I got an explanation for these so all set. Apparently we're supposed to assume if receivables aren't sold the firm would seek debt financing instead hence increased assets and liabilities.

A CFA Level 2 Discussion About CFAI TEXTS, VOLUME 2, PAGE 414, QUESTIONS 16 AND 17

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This topic has 1 reply, 1 voice, and was last updated Sep-181:32 am by googs1484.

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  15 Sep 2018 at 1:32 am
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  I got an explanation for these so all set. Apparently we’re supposed to assume if receivables aren’t sold the firm would seek debt financing instead hence increased assets and liabilities.
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