How much detail do you need to give? Take 2006 AM Q4 B. It asks whether the pension fund has average, below average or above average ability to take risk compared with the average for the cruise industry with respect to the following risk factor: i) workforce age and to justify the response with one reason. And in the question body is the table which shows the the pension fund sponsor company’s average workforce age is 33 versus the industry average of 40. So obviously the answer is that the fund has an above-average ability to take risk. Now is the tricky bit - the justification. For my justification I said: “- younger workforce age (30 vs 40) of the company allows for greater risk taking ability” CFAI’s justification said (with some editing): - “The average age of 33 is younger than the industry age of 40. Overall the relatively young age of the employees increases the relative duration of the ACLP’s liabilities and gives ACLP an above-average ability to take risk compared to the average for the industry” So, CFAI mentions the fact that 30 is < 40, and then it states how this increases the relaitve duration of ACLP’s liabilties. So would my answer get full credit? Is the justification the fact that 30 is < 40, or is it actually because the relative duration of the liabilities is higher, which means a greater risk taking ability? Do you see what I mean? How much detail would be enough?
Depends on CFAI’s (grader’s) subjective judgments ?
i would think it should be sufficient to simply say that the younge workforce, will increate the time horizon , and therefore, increase ability.
I’m pretty sure you would get full points. Schweser, and Joey, have always said the graders are dying to give you the points. After passing last year and knowing what I wrote, I agree with them. You don’t have to write a book and they won’t dock you points for spelling and grammar.
CFAI themselves state that the guideline answers are (sometimes much) longer than responses that receive full credit. I would say write as much as you need to to get your thoughts across and no more.
Thanks guys. I just wasn’t sure where we would draw the line. How much detail to add to your answer.
This question is addressed in the FAQ’s on CFAI’s website. I can’t find the exact response right now, but it’s in there somewhere. https://www.cfainstitute.org/utility/faq/Pages/index.aspx
This bit? “If my answers differ from those in the published guideline, will I receive any credit? Possibly. The guideline answers are intended to show a representative candidate response given the CFA Program study materials assigned in that year. Guideline answers may not include all alternative acceptable answers. One of the reasons the exams are graded by CFA charterholders who are experienced practitioners or academicians is to ensure that all acceptable answers receive appropriate credit. Your answer may have received partial or even full credit.”
Yes, that is it. There is also another FAQ about writing in bullet points rather than full sentences.
My question : Why CFAI can not publish the guideline answers soon after the exam ? They publish 2009 guideline answers as late as Jan / Feb in 2010.
Why does the timing matter so much? Just curious.
yeah who cares when guideline answers are published? pass or fail, I don’t care to look at those answers for the rest of the year.
CPierce Wrote: ------------------------------------------------------- > Why does the timing matter so much? Just curious. At least candidates know if they have answered to the key points.
Its so subjective grading yourself… I realize the more I write, the more i sound like an idiot cause i dont know what im talking about. I am only writing things i know are facts on the test, and then being very vague otherwise and hoping the graders really are dying to give me points…
An increase in the liability of a Pension fund, increases Risk taking ability?
LaGrandeFinale Wrote: ------------------------------------------------------- > An increase in the liability of a Pension fund, > increases Risk taking ability? No. Increase in liability makes pension plan more conservative.
Thanks dawg. I don’t know what is being discussed in this thread above. Got more confused after reading it.
David Hetherington of Stalla advised to focus on the minutes assigned to the question. So if it’s a 3 minute question they are not expecting more then a bullet point or two, whereas a 12 minute question they are going to want some detail.