# How Tricky Are the Distractors on Exam? (Sample Tricky Questions Inside)

I am just wondering, in general, are the distractors really meant to trick you? Or are they off the wall far enough that if you accidentally make one mistake, that you won’t hit the distractor choices? One example (The calculations are NOT given, they are only meant to show how I derived the distractors): Starting with \$1000 and interest rate is 4% compounded quarterly, what is value at end of 1 year? a. \$1040.00 (\$1000*1.04^1) b. \$1169.86 (\$1000*1.04^4) c. \$1040.60 (\$1000*1.01^4) d. \$1010.00 (\$1000*1.01^1) granted, this one is quite easy numbers, and I can probably catch a mistake even if I ran through this really really fast (yes, I am very careless on these things) Second example: What is the one period return over two periods given an investor has \$8,500 but started with \$10,000? (same idea w/ calculations, not given, and I had 6 answers that I could have easily came up with… scractch b and d if you want) a. 8.47% (\$10000/\$8500)^.5 - 1 b. 17.65% (\$10000/\$8500 - 1) c. 8.82% (\$10000/\$8500 - 1)/2 d. -0.15% (\$8500/\$10000 - 1) e. -0.078% (\$8500/\$10000)^.5 - 1 f. -0.075% (\$8500/\$10000 - 1)/2 (Actually, just to confirm, should we use geometric mean or arithmetic mean? I say geometric) These distractors I will probably very easily hit due to wanting to finish a problem quickly, carelessness, time pressure, etc. Given only the correct answer will probably make it easy to get it right. A not perfectly well phrased question, but the idea is given: Which of the following is most accurate given that the P/E will not change due to some change in stock split or something. (However, they give you something like P = 95.7, E = 19.2 scattered throughout the problem) a. The P/E will remain at 5.01 b. 0 = 0 c. 1 = 0 d. 1 = 2 I will VERY likely have answered A and moved on… (BTW, P/E is 4.98) so, my answers to these will be: C, E, B

Thanks… Some of these are really easy to miss due to careless mistakes… and only 90 seconds per question…