When the test asks for “discuss one” or “justify with one” - Be mindful that the grader may break up a run on sentence with two reasons into two justifications and only select the first to grade. Make sure you front load any sentence in this structure. For instance. Question: Justify A portfolio and justify with one reason why the selected portfolio is the best choice. Answer: Portfolio C is the best choice because it has exposure to real estate, commodities and most importantly has the highest Sharpe ratio, a measure of risk adjusted return. To the grader, this may be interpreted as, “Portfolio C is the best choice because it has exposure to real estate”. If that’s not on the grading grid, you might get a zero. Make sure you think about that on your response, a reword it as, "Portfolio C is the best choice because it has the highest Sharpe ratio, a measure of risk adjusted return, partly due to its diversification into real estate and commodities. " Just something I was thinking about. Keep it in mind.
How aobut “Identify” an issue? Do you just identify the issue, or you should add a brief explanation?
I plan on always adding extra, to be safe, if I know more. The point is, if they say “one” and you list two, they only use #1. If you make a run on sentence with 4, they will use the first part of the sentence. Make sure the one you want them to use is first.
I would just list reasons (two or three to be safe) without writing any sentences… at the end of the day, they are looking for key points… and they actually prefer (!) bullets to sentences (so I’ve heard)
so can you bullet point for example, if they ask you to list two risk to insureres when rates rise: - disintermediation - market value risk does that get you points? or you need to explain them?
this is gonna sound awfully silly, but here goes: make sure you answer the question!! Answer what is asked. AND at L3 we sometimes forget to mention the basics (e.g., if you’re talking munis: “Investor X is in a high income tax bracket and could use municipal bonds, which are tax exempt at the federal level…”). sounds goofy, but give the grader every, and I mean EVERY reason to pass you! They want to pass you, and we need every point we can get. also, if the question asks something like “provide three reasons and why?”-- that grader is looking for 6 answers.