CFAI has posted sample 2011 L3 essay questions here: http://www.cfainstitute.org/cfaprogram/courseofstudy/samples/Pages/index.aspx
Answer 3A in the guidelines answers seems to be wrong. They should say “private donations increase risk tolerance” and “expected inflation decreases risk tolerance” and circle one box each instead of saying “increasing private donation increase risk tolerance” and vice versa.
Am I missing something here?
Sorry, 3B; not 3A.
It does say “change in blah” but then the template says “circle one”.
If more of your funds needed to operate are coming from private donations, rather than from public appropriations, than your risk tolerance would decrease. Public approprations are viewed as “safer or more dependable” than private donations which can be dropped by the donor at any time.
I understand the answers, just confused by the format. Why not circle one (increase/decrease) and give one justification for that direction? The guidelines answer give both (what happens when private donations increase AND what happens when they decrease) and leave the “increase/decrease/does not change” box uncircled.
Would confuse the hell out of me on exam day.
When will they released 2012 the real question? Cant wait to see how badly I did in the Am. lol