Correct way to answer?

2014 mock Q 6 has Endowment and its ability to tolerate risk is high because of long time horizon and low return requirements.

Q provide two reason that endowment has above average risk tolerance. (4 minutes)

Answer 1:

The two reasons are:

(1) Endowment’s time horizon is long.

(2) Endowment’s annual spending requirements are low.

Answer 2:

(1) Endowment’s time horizon is long so it allows to tolerate fluctions of returns and has time to make up for any shortfall it encounters along the way.

(2) Endowment’s annual spending requirements are as low as 2%.

Looking at this obviously Answer 2 seems right.

My question is how much points would I get for Question 1?

It’s hard to come up with nice looking sentense and write it in time… (my answer 1 essentially says the same thing but its not as detailed as answer 2).


One more like this.

Question 11 says

Is education approach approprate for xxx?

My answer is

Yes its appropriate because his biases are cognitive.

Guideline answer -

Lam’s behavior shows evidence of primarily cognitive biases (availability, representativeness). Cognitive biases result from errors in processing and retaining information, so modification through education can have an effect. Emotional biases (such as those demonstrated by Ashland) result from feelings and instincts, and are much harder (if not impossible) to modify.

Q will my answer lose any


How many minutes is the second question?

2 points.

do tell me your thoughts on 1st question as well. i’ll try to take one more exam based on your inputs…

Thanks …

I thought the first question you posted you answered fine IMO…

I think you could have expanded on question 11 if it was worth more points. Maybe add that education will have a positive impact since his biases are cognative?

ok thanks… kind of makes sense…

what about you? how would you have answered 1 and 11? i think you took the same 2014 exam…

do you mind sharing your answer?

I would have answered #1 the same as you.

#11 I think I put some like

“yes, his biases are cognative which can be modified through additional investor education”

Thanks… I found one more sample answer to this exam bykjsgbp

in this thread if you want to look at it…

Sorry not sure if you care about this topic or not… for me I am weak in writing and don’t want to fail for that reason…

Galli, I appreciate your time…:slight_smile:

no problem, hope it helps