Grading your AM section

CFA Level III
#1

how tough are you on grading your answers?

I want to get your thoughts on if i’d get full credit for a question in the 2012 AM exam

The question asks

a. determine whether delport should buy or sell shares of the underlying equity

Guide line answer is

i. Delport needs to sell shares in the underlying equity. By selling put options to his client, Delport is net long the underlying equity. Therefore, the hedge needs to be a short position. He must sell shares to hedge his exposure.

My answer

Sell shares of the underlying.

I think that part is worth 2 points, would I get full credit?

#2

If that is all of the context, Id give you credit. It doesnt ask why. Also, its two points on a 180 pt morning session. That would suggest to me that it shouldnt be a very in depth response.

#3

Boom! i’m chilling then!

#4

Where does it show you how many points each question is worth? I never know how much to write if it says “Why does…” instead of “state one reason why…”

I just did my first mock today (2009). I either got perfect or I bombed the questions.

#5

each question is worth the same number of points as the number of minutes you take to answer the question (or the alloted time).

#6

Not sure whether you’d get full credit, cause your response takes kind of 15 seconds to write, am I wrong?

I think if you’d have written “sell shares of the underlying because he wants to hedge his net long position by selling puts” would have been better and enough.

#7

I think that you need to demonstrate understanding. Convey the essence of what is being asked.

Even someone who has never picked up a CFA text would be able to say “Buy” or “Sell”

I would agree with sharky7.

#8

But the question doesn’t tell you to explain if it said

determine whether delport should buy or sell shares of the underlying equity, and explain why?

then I’d agree

but the key word is, determine, seems like the answer is binary.

#9

You should briefly explain why you chose a particular answer. CFAI is not going to lob a 50/50 AM question at you like that I wouldn’t think.

#10

We can say that it took 15 minutes for a 2 minute question, but keep in mind in that two minutes you have to read the essay, read the question and figure it out. I’m not going to say that’s enough (hopefully someone has more clarity) I’m just saying just because it takes 15 seconds to write the answer doesn’t mean it takes 15 seconds to solve the problem

#11

If it says “determine” in my opinion for 2 marks you do not need to explain why you have determined what you have.

I would say your answer gets the full 2 marks.