Is it just me or does anyone notice that the focus of the LOS and Schweser Notes for this chapter is very different from the the EOC questions that they provided? From the EOC questions, it appears that knowing the cash flow characteristics of cash and carry as well as reverse cash and carry appear to be more important than anything else. Not sure if anyone else made this observation??
I made this observation as well and let me give you this little factoid – cash and carry shows up in the 2008 level 3 exam. Take a look at the morning session for the level 3, 2008 exam, question 6. It asks you to “COMPUTE … profit on a reverse cash and carry arbitrage in the copper market”. Note that the relevant LOS says (this is from the 2008 exam): a) discuss the unique pricing factors for commodity forwards and futures… b) identify and explain the arbitrage situations… So, yeah. I had that same observation. -=RB=-
stuff like that just makes me so angry, either stick to your fucking word or don’t print an LOS.
I have seen other instances where this has occured at level 3. Most recent was in the 2009 exam related to adjusting a companys beta for pension assets. The question clearly required calculation but the LOS merely said explain. To CFAIs credit though the EOC questions included the calculation.
its u
I agree, I’ve seen quite a few calculations in the EOC’s where the LOS’s do not call out calculate specifically. There is so much material to remember at this level I’m having trouble keeping everything fresh. Multiple choice is easier when remembering stuff - it’s right there in the answer. I keep wondering how I’m going answer the questions on things I haven’t looked at in a while. My answers are going to consist of: “You know it’s that thingie with the other stuff that needs to taken into account.” somehow I don’t think the CFAI is going to go for that.