Answer formats

Please could anyone offer their opinion on what actually earns marks when providing a justification for level of risk tolerance. Specifically, question 1A, 2014 AM mock:

question; "Justify why the clients have a below-average risk tolerance. " model answer 1: “Their investment portfolio is heavily weighted towards fixed income, indicating a low willingness to take risk

How important is the “indicating a low willingness to take risk”… if I were to just write “they have a large weighting in FI in their existing portfolio”, would that be sufficient?


My Suggestion and the suggestion from the tutor is to spell it out for them.

My answer would be ‘They have a large weighting to Fixed Income securities which is a less risky asset class then equities’ or something along those lines.

No, it wont be. From what i have seen, generally the justification carries two marks. And just saying heavily weighted towards fixed income doesn’t suffice, it _ might _ get you one marks and that’s about it.

I read a super helpful approach somewhere on the forum to address questions like this.

Every time you write an answer, ask yourself ‘so what?’ In this case - 'they have a large weighting in FI in their existing portfolio, which means they have a low willingness to take risk (in italics is the answer to ‘so what’)

It is even more important to mention this in this particular question because risk tolerance is both due to ability and willingness. I won’t expect the grader to assume that i am are trying to make a point regarding his willingness.

Rex, was it you who told us about the ‘so what’ approach? I seem to remember it was you

Thanks both, your answers really helped.

I know that giving a “so what” answer will be enough, considering the detail of the model answers, but it does beg the question… why is it enough to say “because FI is less risky”… if we don’t need to explain why FI is “less risky”. I could easily ask “and why’s that” (that FI is less risky) in response to a “so what” answer. Just seems quite arbitrary. meh.


Rex if you will have started there writing Dostoevsky novel, you’ll end with 4th question solved in 3 hrs. Use bullets or short concisely written answers.

It also goes back to the meaning of the word justify as “showing or proving something to be right.”

If you just say it is because they are holding a lot of fixed-income you are leaving the grader to wonder if you know what that really means. In theory you could have picked a random piece of detail from the passage and stuck it in your answer hoping it was the right one. It is not until you link it back to core exam concepts that you get full credit.

This is a really common mistake. You see it a lot with candidates that write the same level of detail when the bolded command word is justify vs. identify.

JUSTIFY isn’t the same as identify. It by definition requires you to tie whatever detail you include to a reason why that detail matters

Identify=state=determine? Very short answer are acceptable?

Show, discuss & justify = require slightly longer answers?