Ability and Willingness: Risk tolerance

The biggest confusion I have with the above is:-

How/when do you ascribe the ability and willingness to tolerate risk is Average? Where is the fine line that distinctly distinguished it?

The most difficulty part in AM is to figure this out unless it is blatantly apparent to be below or above average. Anything in between is anybody’s guess.

Any thoughts?

tell me about it!

schweser made a list somewhere in one the exam book answers.

they tell you to start with average. then everytime you see a clue you move up or down a notch.

My question is also that for example,

CFAI answer is below average with some explanation.

my answer is average with the same explanation, will I get credits?

I think if your explanation is exactly the same and you choose average then you will maybe get some points, it doesn’t show that you really fully understand the concept. I think it would be better if you had some points they do not have that caused you to choose a different tolerance.

For example they have something about an asset base being large in relation to the expenses, but you have the asset base being only adequate for the expenses. Size of asset base can be subjective and one asset base could seem large to one person and small to another. In this case CFAI would move their risk tolerance up a notch, but you would keep it at average.

I’m not a grader, and I don’t know anyone that is (at least I don’t think I do) so I can’t say this is accurate. However, I think if you put adequate reasoning behind your choices, and that reasoning would lead a REM FMP to the answer you provide (even if it is not their correct answer) It shows that you know the concept - you just may have had errors in your inputs - then you will get at least a little more partial credit(if not full credit depending on what the question is asking).