Explain inputs in Morning section

CFA Level III
#1

Hi All,

I am just wondering if it is mandatory in the exam day to explain the meaning of the different inputs when you are asked to calculate something. I mean for example

Formula of FVIFt= (1+r(1-t))n

where

r= pretax return

t=accrual taxes

n=time of investment

or just to write down the formula and substitute it with the inputs in the text

I think it would be a waste of time as long as CFA curriculum notation is used. What do U think guys ?

Thanks

#2

Not required. In fact, you don’t even need to write out the formula if you don’t want to. Some recommend it for the possibility of partial credit, but I didn’t. I’d say go with what makes you comfortable within what is a time crunch that should not be taken lightly. In the end, if a question asks you to “Calculate” with “Show your Calculations”, you can simply write out the inputs in the formula and state your answer with an equals sign. I usually circled the final answer when it made sense to do so to make sure my final result was clear to the grader.

Good luck!

#3

Watch out to do not forget add currency mark when applicable (eg. $, USD or what else).