I have been doing some of the past AM sections of the exam and struggling with time. Some of the official answers from CFA have an enormous amount of information and there is no way to write down all that in 3 hours.
What is the optimal amount of information. For instance, if a question asks to calculate (command word: calculate) pure sector allocation, would a candidate get full marks if he simply wrote:
(31.35% - 11.79%) x (4.98%-4.01%) = 0.19% ?
This is an example from 2015AM, Question 5, Part D.
Is anything else required? The official answer states the formula, then the calculation, then explains that a decision to overweight a given sector that outperformed resulted in a positive contribution bla bla bla.
If it says calculate you just need to calculate. If it says something else like describe than start putting in those explanations i.e. decision to overweight utilities led to positive performance, etc.
Calculation questions usually ask you to show your work. If I were grading a calculation that had no work I would probably zero it even if it were correct. Others may not be as harsh, but you are exposed to that kind of risk. So I think you risk losing way more by NOT writing the work out…
yes i agree the work needs to be shown- but before showing the work, should one also write the full formula? For example in this case (wp-wb)*(Rindustryb*Rbenchmark)?
Oh, probably not. S2000Magician wrote a good discussion on this a while back but too lazy to find it. But the gist was that if you know how to use the formula correctly then to the grader you obviously knew the formula. So there’s no compelling point to do so.
The answer guidance given by CFAI for past papers are just meant to give you the reasonning behind the answer. They don’t expect you to actually write all that in the actual exam.
Like mentioned earlier, if it asks calculate, just show calculations. No need for any descriptions.
Don’t bother putting down the formula unless you’re on the edge regarding the inputs but know the formula by heart. Just plopping in the final answer won’t cut it.