Looks different than Schweser, seems like they are not comparing to a benchmark… Damn, that was something I thought I had down. If it showed up like they had it I would get it wrong.
i strongly recommend going over CFAI material for this one
I just looked, Schweser = ball = dropped
It’s interesting they dropped the ball last year and are dropping big huge balls again with the release of 2008 Notes.
what did they do now ? I just finally managed to remember all the formulae from schweser and now they are wrong ? … can i sue them for emotional distress ?
What did they do? They leave out important stuff yet again, even though CFA 2007 exam is available for everyone to see.
This was one of my main gripes last year with regards to the exam last year. I’m very glad you guys posted this. I knew the Schweser version of this type of question pretty well and then on the actually exam it was a completely different format. Huge curve ball which I missed…but I think Schweser did too. I would have thought they would have been sure to address it this year.
…Maybe this curve ball question helps explain the low pass rate last year? It certainly was a contributing factor. Anybody who studied only Schweser probably got it wrong unless they were really really clever. To be fair Schweser does recommend that you do read the main CFAI texts and their notes are supposed to be a companion to the texts.
I called this one CFAI’s “lets headfake the people who only read the notes of study provider’s question” and not their CFAI texts.
can someone explain the oversight to me?
Err…what is the issue again?
MGG - i just found this question in the 2007 exam. you jumped the gun - the local index return IS the benchmark. schweser didn’t drop the ball…
Ok, in all honesty, you could answer ii and iii quite easily (question #9 2007 CFA). The only thing you really had to guess was Market Return calculation, which was not shown in Schweser. All of the Schweser-reliant crowd I could only guess got Market Return confused with Market Allocation Effect which requires the weights of the benchmark. That’s the issue.
strikershank, - the issue is not the benchmark return but benchmark weights.
I’ll ignore this problem since it appeared in 2007. It is not the kind of topic being tested every year. For 2008, I would pay more attention to micro attribution or implementation shortall which were not tested in 2007. YMYD
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Strikershank - Of course you don’t need benchmark weights, because it’s a different calculation. Had you been asked to calculate market allocation effect - you’d need those.
You can use the same formulas as Schweser to answer the question making Benchmark weight 0 I think… Still in process
My last statement is correct… Still makes it confusing the way CFAI put it on the exam…