Hi,
I’m wondering whether CFAI mandates that we calculate responses in the AM session in a certain way?
For example, I find the way the curriculum calculates max profit, max loss, break-even on options quite confusing and not intuitive at all. So, I have my own way of calculating them.
During the exam, do we have to calculate the answers in a certain way and do they take off points if you don’t use the “official” methods?
Good question. I’d like to even know the same thing about the H-model. I’ve been using the level 2 formula all along.
They do not.
As an example, I’ve long advocated that when changing, say, the stock/bond allocation of a portfolio and the equity beta by using futures contracts that candidates do a single calculation to determine the number of contracts needed, while CFA Institute always uses two (one to change the allocation, another to change the beta). A couple of years ago I e-mailed them to ask if a candidate would get full marks doing it the way I suggest (assuming that the answer is correct). Their reply was that if the answer were correct the candidate would get full marks, even if their approach differed from CFA Institute’s guideline approach.
Thanks a bunch S2000!
My pleasure.
Level II H-Model formula set up ALL. THE. WAY.
i love the level 2 formula…and Phil Collins
Thank you sire
You can use your own method, but be sure to show your work. Even if you don’t get the final answer correct, some calculation questions (the ones worth a lot of points, such as 6 points or more) have intermediate steps/answers that you’ll need to solve for. Make sure you solve for those intermediate steps, as they’re certainly worth points.
-Alex