Was wondering if any of you were having the same issue as me. For the IPS questions (both individual and institutional) i am finding that when comparing my answers to the Schweser answers, I am always going into a lot more detail and adding a lot more points than they do. Is this going to cost me points in the exam?
For instance, this years book 1 AM paper 2, Question 1 (Barney Smythe) - The answer for the Unique considerations part is that there are none. However I mentioned:
The fact they have mentioned they don’t want to lose >5% in one year could exclude them from investing in certain asset classes
That their large windfall of 2.5m will need to be invested now into a diversified portfolio, and could change their spending habits and would need to be monitored when updating IPS annually
They stated not wanting to have any individual investment that is too risky in their portfolio - and then mentioned the family could require education on the benefits of diversification, overall risk v return etc etc
Am I going to lose marks for saying there are Unique circumstances here when the answer says there aren’t? I realise points 1 and 3 should also be included when considering the risk constraints, and also added them in there. Apart from the fact that writing so much takes ages, will i get marked down for putting these things also in Unique considerations?
Really hating these IPS questions…
you may lose points, that I am not sure, but you sure will lose time.
So be precise, write small, and write relevant stuff.
also remember - CFA institute, Schweser write a lot more in the guidance answers - as they are teaching you for the exam.
As cpk said, you’re writing way too much.
How I wrote my answer to the question:
Willingness - below average because 1) Smythe’s don’t want to lose more than 5% in any given year, 2) don’t want any single asset that is too risky, and 3) current portfolio of cash suggests they aren’t comfortable investing in risky securities.
May have written some more but can’t remember.
I understand I’m probably writing more than needed, but want to make sure i cover every base. I think timing isn’t going to be as much of an issue for me so would rather be overspecific than under and potentially miss the point they are looking for.
I think the thing I am wondering is does anyone have an idea whether the CFA mark negatively? i.e if you include something less relevant along with something more relevant, they will take off a mark?
if you go along the path you are - writing as much as you are, believe me, you will run out of time on the AM exam.
And if they ask you for 2 reasons - and you have not listed them out at the very top of your answer - even if you have written them later - you will NOT get a mark for that question. Do not know if you want to call it NEGATIVE marking or not. You will be awarded a ZERO instead of the marks you were supposed to get.
Try not to cover EVERY BASE - that is called FLUFFING. but cover the REQUIRED base - be precise. for your own good. Specificity will get you the marks, will save you time, and will help you pass.
The floor is zero.
As far as I know, writing an incorrect answer will not lose you a point that you earned by writing a correct answer.